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Tax Police Probe Russian Vodka Co.

August 4, 2000

MOSCOW (AP) _ Tax police on Friday seized documents from the well-known Kristall vodka distillery in Moscow as part of an ongoing investigation into the company, officials said.

Tax officials took documents in connection with an audit conducted earlier this year that uncovered possible financial wrongdoing, including underreporting of profits, the Interfax news agency said, without providing further details.

Kristall makes some of Russia’s best-known vodkas, including the Stolichnaya brand.

Tax police have become increasingly visible in recent weeks, taking part in several high-profile raids. Observers have said the raids are strong indications the government is cracking down on big business.

Cases have been launched against several major companies this summer, including prosecutors attempting to overturn the 1997 privatization of metallurgical giant Norilsk Nickel and a tax probe of major oil company Lukoil.

Another company targeted by tax police has been Avtovaz, Russia’s largest automaker, which was charged in July with tax evasion. But prosecutors dropped charges on Thursday, saying there were insufficient grounds to continue the case.

Still, tax police said Friday that an investigation into the company would continue. In a statement, they said that over the course of the earlier probe, ``other factors were discovered that require an audit of the company’s financial and business activities ... as well as inspections of Avtovaz’s whole dealership network, including abroad.″

Avtovaz, based in the southern city of Togliatti, produced 650,000 vehicles last year and has been negotiating a joint venture with the U.S. auto giant General Motors.

The company reportedly is associated with Boris Berezovsky, one of the Russian tycoons often called ``oligarchs″ because of their purported political influence.

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