Kazakhstan investigates former BTA bank chairman

ASTANA, March 10 (Reuters) - Kazakh prosecutors said on Tuesday they had launched a criminal case against the former chairman of the country's largest bank BTA BTAS.KZ who was sacked after the bank's nationalisation.

Mukhtar Ablyazov, who had chaired the BTA board until early February, last month accused the government of "corporate raiding" and said the nationalisation had been illegal. The government has said BTA would have collapsed if it had not been nationalised.

The Prosecutor General's office said on Monday it was investigating Ablyazov and one of the former BTA executives Zhaksylyk Zharimbetov for fraud and money laundering.

At a news briefing, Deputy Prosecutor General Rakhimbek Mamyrbekov alleged that both had "laundered illegally obtained bank funds by lending to front companies".

Ablyazov and Zharimbetov could not immediately be reached for comment.

Ablyazov, once an influential businessman and energy minister, joined the ranks of the opposition in 2001 and was sentenced to six years in jail for corruption in 2002, a charge he denied.

In 2003, President Nursultan Nazarbayev pardoned Ablyazov who was released from prison, publicly gave up politics and returned to business. (Writing by Olzhas Auyezov)