M. Continuo

Bosnian police arrest two ministers, 9 others on corruption charges

SARAJEVO (Reuters) - Bosnian police arrested 11 people on Wednesday, including two regional ministers and a national parliament deputy, on charges of involvement in organised crime, money laundering and tax evasion, police and prosecutors said.

The government has made efforts to crack down on graft in recent years to qualify as an EU member. But the Balkan state's decentralised system of power-sharing since a 1992-95 war has helped foster networks of political patronage and corruption.

"So far 11 individuals have been arrested on suspicion of committing the criminal acts of organised crime, tax evasion and money laundering," Kristina Jozic, a spokeswoman for the State Investigation and Protection Agency (SIPA), told reporters.

SIPA named Jerko Ivankovic Lijanovic and Milorad Bahilj, the agriculture and trade ministers in Bosnia's autonomous Bosniak-Croat federation, as being among the detained.

The police also detained Jerko's brother Mladen Ivankovic Lijanovic, a parliament deputy who leads the party both they and Bahilj belong to, and another three members of the Lijanovic family, which owns several meat-producing firms.

Mersed Serifovic, vice-president of Lijanovic's party, questioned the fact that the arrests came just a month ahead of Bosnia's Oct. 12 presidential and parliamentary elections.

"The timing of these activities makes us believe that some leading political parties might be behind the arrests and that this might be political retribution," he said.

SIPA said those held were suspected of evading taxes by setting up a number of companies that ran up huge tax debts and were later closed without paying them. The companies dealt with import, production and processing of meat.

"The investigation showed that an organised criminal group has made unlawful gains of some 11.6 million Bosnian marka (£4.7 million) through its illegal activities," Jozic said.

She said the operation was conducted at 17 locations, including in the capital Sarajevo and in the southern towns of Mostar, Siroki Brijeg and Grude. Three more people will be questioned in relation with the case, she added.

"The investigation into the case has been under way for quite a long time. The prosecution has collected a lot of evidence against the suspects and their involvement in organised crime and tax evasion," said Boris Grubesic, a spokesman for the prosecutor's office.

He said the suspects would be handed over to the prosecutor, who will decide on further measures after their questioning.

(Reporting by Maja Zuvela and Daria Sito-Sucic; Editing by Zoran Radosavljevic and Hugh Lawson)