Zsolt Nagy, the Romanian Communications Minister, wrote to Credit Suisse, demanding that the bank step down from its advisory role on the forthcoming sale of the Government’s remaining 46 per cent stake in the former telecoms monopoly Romtelecom — the Romanian state’s largest share offering to date.

The Swiss bank, which has advised the Romanian Government on a series of important privatisations, declined to comment on the letter or on its prospects of securing work in Romania in the future. Analysts expect that the bank, whose senior management has been invited to Bucharest for talks, will step aside graciously rather than risk inflaming an already tense situation.

The decision by the Government to drop Credit Suisse came only hours after Vadim Benyatov, the head of the bank’s Central European and Eastern European business, was arrested as part of a criminal investigation into the sale of state-owned assets.

Mr Benyatov, a US citizen and London-based managing director at Credit Suisse, was detained on Wednesday night with Stamen Stancev, a Bulgarian who works as a consultant for the bank, and two high-ranking officials of the Romanian Government.

Romanian state prosecutors, who have not identified which privatisations they are looking into, have accused Mr Stancev of being a key player in a network of corrupt Romanian officials with links to organised crime groups.

All four men, who are suspected of leaking confidential documents to potential bidders in government sales, will be held for 20 days after judges at the Bucharest Appeal Court approved their detention yesterday afternoon.

Mircea Calin Flore, a vicepresident at Credit Suisse, and Michal Susak, a former managing director, have also been named in the investigation, although neither has been arrested or detained.

Credit Suisse said that it had “no reason to believe” that any of its staff had acted inappropriately and that the bank would co-operate fully with the investigation.

Mr Stancev has also denied any accusations and said that those who charged him did “not know the rules of consultancy”. He acknowledged that he had relationships and had held meetings with “almost all ministers” but said that he had never acted illegally.

He said: “My activity as a consultant is harmed by this investigation, and the companies I work for said they would stand by me.”

Mr Stancev asserted that he had attracted more than €3 billion of investment to Romania.

Investigators are understood to have acted after a tip-off by the Romanian Intelligence services that some privatisation contracts posed a threat to national security.

News of the inquiry has broken only one month before Romania is scheduled to join the European Union, on January 1. In the years leading to Romania’s EU accession, the EU has persistently demanded that the Government in Bucharest clamp down on corruption.

The country in brief

Source: CIA Factbook

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