UPDATE: Putin spox: Magomedov’s arrest follows budget spending checks

(Adds comments by business ombudsman in last two paragraphs)

MOSCOW, Apr 2 (PRIME) -- Arrest of brothers Ziyavudin and Magomed Magomedov, co-owners of Russian multi-industry holding Summa Group, is not a one-time measure, but a focused policy of monitoring of budget spending, presidential spokesman Dmitry Peskov told reporters on Monday.

“No, this is not some one-time action. You know, we conduct tough and straight policy in monitoring of budget spending. We’ve heard about the Magomedov brothers’ charges. The investigation is going on, so it would be incorrect to say something about it. The court is to study the evidence and to define the degree of guilt or innocence of the arrested people,” Peskov said.

On March 31, the Tverskoi District Court of Moscow sanctioned arrest of the Magomedov brothers on charges of a 2.5 billion ruble embezzlement. It also arrested Artur Maksidov, CEO of Summa’s construction subsidiary Inteks, on charges of a 669 million ruble embezzlement.

Ziyavudin Magomedov’s arrest pushed shares of his companies -- Commercial Port of Vladivostok, Novorossiysk Commercial Sea Port (NCSP), and railway container operator TransContainer – down on the Moscow Exchange.

Peskov said that claims that arrest of the Magomedov brothers is part of the fight of different political elites prior to formation of a new government is mere gossip.

Business ombudsman Boris Titov said he believes that arresting entrepreneurs during investigation is destroying their business, while in case of the Magomedov brothers a house arrest would be sufficient.

“We are against arrest of entrepreneurs at the stage of investigation. In accordance with the 108 clause of the Criminal Code they should not be arrested, because this destroys their business. In case with the Magomedov brothers it (business) may turn to be in a very difficult state. If there was a threat of fleeing aboard, a house arrest could have been applied,” he said.

(57.2649 rubles – U.S. $1)

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