Czech police are investigating losses in Komercni Banka's (KB's) deals involving an Austrian businessman of Israeli origin, Barak Alon, and the former director of the KB financing department, Jirina Kaplanova.

According to a report in the Prague Daily Monitor, state attorney Frantisek Fila has filed a charge alleging suspected fraud against 15 people. The Czech Republic based bank says it has incurred damages of 170 million kuruny (CZK170 million -about US$6.9 million) excluding interest.

Previous prosecutions

Kaplanova has already been prosecuted in two cases related to KB's record losses of almost CZK10 billion.

One of these involved L/Cs used in deals by one of Alons's Austrian firms, BCL, and resulted in losses of CZK 8 billion.

The bank also lost CZK 1.5 billion providing credit to the former head of the Czech Football Association, Frantisek Chvalovsky.

More suspect L/Cs

Now KB has filed new charges because it has unearthed more L/Cs that it claims were improperly issued and were not settled according to the state attorney.

Alon is alleged to have arranged 'ghost' grain deals with a Ukrainian firm. KB opened the L/Cs for these deals. There was no grain delivered under these deals but Alon and his accomplices ultimately received the proceeds from the L/Cs, to the value of up to US$250 million.

None of the money has been returned.

More bank suspects

Eight KB employees are apparently implicated in the new charges, most of whom have already faced prosecutions related to other charges.

Apart from Kaplanova and employees under her management, former members of KB's board have been prosecuted for breach of trust related to the bank's losses.

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