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Indicted Serb Leader Signs Deal With KPMG Subsidiary

May 29, 1996

NEW YORK (AP) _ A Bosnia Serb leader wanted for war crimes says he has signed the first agreement with a foreign business _ a deal with a subsidiary of the American accounting firm KPMG Peat Marwick.

Just how far the deal goes is unclear. KPMG Peat Marwick issued a statement saying its Barents Group subsidiary ``is not performing any work and will not do business with the current regime in Srpska.″ But the statement did not deny that a deal had been signed.

Company spokesman George Ledwith could not immediately clarify the statement on Wednesday.

The Clinton administration has called on Americans not to do business with Bosnian Serb leader Radovan Karadzic.

Karadzic has said he met with Phillip le Roux, representative of the Barents Group, a Washington-based subsidiary of KPMG Peat Marwick that specializes in Eastern and Central Europe, and with Bernd Robertz, president of Intercam Investments AG, based in Switzerland.

Earlier this month at a press conference in the former Yugoslavia, Karadzic said the signed agreements are very important for stability of the whole of Srpska, his self-styled Bosnian Serb republic. He said that the help from KPMG Barents is expected in privatizing state-run enterprises.

``This American firm will help us in building a new system of regulations and methodology of privatization,″ Karadzic said.

KPMG Peat Marwick issued a statement on behalf of its subsidiary Tuesday, saying that the Barents Group ``will not undertake any privatization work in Srpska until the government leadership issue in that country is resolved, and a leadership acceptable to the international community is in place.″

At his news conference, Karadzic said the deal with Intercam Investments would help develop energy resources, oil refineries and traffic communications.

Robertz defended his company’s deal and Swiss officials said there was nothing illegal about the contract he signed.

``We are not making contracts with single people, but governments,″ Robertz told The New York Times. ``We handle medical supplies and do some engineering and consultancy work. We do not supply military equipment.″

He said it was too early to tell how large the contract would be and what equipment they would be supplying.

Karadzic said Intercam Investments was cooperating with Westinghouse, and that there might be generators and other Westinghouse parts for power plants in Srpska.

A call to the Pittsburgh-based Westinghouse was not returned Wednesday.

Karadzic, a psychiatrist often called ``the Doctor,″ has set up headquarters in Pale, a former ski resort near Sarajevo. Despite being indicted by the U.N. war crimes tribunal in The Hague, Netherlands, he remains firmly in power.

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