After challenging prosecutors over missing billion, Moldova PM faces school probe

CHISINAU (Reuters) - Prosecutors in Moldova announced a criminal investigation on Monday into whether the prime minister forged his school records, after he castigated them for failing to track down $1 billion (655 million pounds) stolen from the country's banks.

The tiny country between Ukraine and Romania has been in a state of economic meltdown and political tumult since it emerged in recent months that the equivalent of around an eighth of annual GDP had gone missing from three banks.

Prime Minister Chiril Gaburici, a pro-European businessman in office since February, called over the weekend for a number of senior officials, including the head of the prosecutor's office, to resign for failing to catch the embezzlers.

But the prosecutors have shown no sign of stepping aside. Instead, they announced on Monday they were investigating the prime minister himself over whether a signature and a stamp had been forged on two of his school documents.

Moldova's febrile politics are hotter than usual with local elections being held on Sunday and polls predicting a strong showing from the pro-Moscow opposition Socialists. Thousands have rallied in recent weeks in protest against the disappearance of the money from the banks.

The country, one Europe's poorest, has been divided since the fall of the Soviet Union between factions that are broadly pro-European and pro-Russian, with both sides accusing each other of corruption during their periods in power.

Its fate has gained new international attention since Russia seized neighbouring Ukraine's Crimea peninsula last year. Russian troops have occupied a sliver of Moldova since the Soviet Union fell, protecting a self-proclaimed independent breakaway statelet loyal to Moscow.

The Moldovan prosecutors' office said on Monday it had launched a criminal investigation into "falsification of documents relating to the education of prime minister Gaburici" following an Interior Ministry probe.

"Given that this concerns a person who holds high state office the investigation will be conducted by the general prosecutor's office," it said.

Gaburici told reporters there was nothing wrong with his school records, and the prosecutors should resign along with the head of the central bank and other officials who had failed to track down the missing billion embezzled from the banks.

?All the information shown on my resume is trustworthy. I am ready to answer any question linked with my educational documents,? he said.

?The leadership of the National Bank and the state prosecutors' office do not want a good country but the continuation of billions leaking out of Moldova.?

Gaburici, 38, a former businessman who ran the Moldovan mobile telephone company Moldcell, heads a minority coalition government with two other pro-European parties. They took power after an election in December even though the pro-Moscow Socialists had won the most seats of any single party.

Moldova last year ratified a political and trade agreement with the EU, incurring the displeasure of Russia which has banned imports of wines, vegetables and meat from the mainly agricultural country. The lack of any real efforts to tackle corruption and carry out deep reform have left many in Moldova disenchanted with successive pro-Europe governments.

Gaburici, though only a short time in power, has been identified with a loss of spending power for the national currency the leu which has lost 35 percent in value against the dollar this year. Moldova's economy, which grew 4.6 percent in 2014, could contract by 2 per cent this year, according to a government forecast.

(Writing by Richard Balmforth; Editing by Peter Graff)

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