French police probe Petroplus insolvency

* Police conducted searches at French headquarters

* Petroplus refutes fraudulent bankruptcy allegations

* Petroplus filed for insolvency on Tuesday

PARIS, Jan 26 (Reuters) - A French prosecutor has opened an investigation into whether Petroplus illegally withdrew funds from its French unit before the Swiss refiner filed for insolvency, a spokeswoman at the prosecuting office said on Thursday.

The "fraudulent insolvency" probe, opened by the Nanterre public prosecutor, on Wednesday saw its financial police unit search the subsidiary's headquarters in Paris as well as Deutsche Bank, where the firm holds its bank accounts.

Petroplus said it refuted all allegations of fraudulent bankruptcy in France.

The prosecutor's office, which had access to book-keeping documents of the French subsidiary when it was put under judicial protection, is looking closely at the transfer of 100 million euros ($130 million), the spokeswoman said.

"The prosecutor's office had access to documents which need to be checked, and more specifically those related to questionable financial transfers," she added.

But the prosecutor may struggle to prove the criminal charge of "bankruptcy by embezzlement" because Petroplus is insolvent in France and in the rest of Europe.

Petroplus filed for insolvency on Tuesday, putting over 2,000 jobs across Europe at risk, after it defaulted on $1.75 billion of debt.

Europe's largest independent refiner by capacity has been teetering since its lenders restricted credit late last year, a victim of thin refining margins and high debt that was a result of its private equity-backed business model.

Petroplus last week put its Petit-Couronne refinery, which employs 550 staff, up for sale and the French government has been trying to find a buyer.

That may be no easy matter.

A dismal outlook for the European crude processing industry, amid falling fuel demand, has prompted several companies to put assets on the market. But even rock-bottom prices have failed to attract bidders, even for good quality facilities.

French oil major Total halted the sale of its Lindsey refinery in the UK at the start of 2012 after failing to find a buyer over the past two years.

Asian companies interested in establishing a European oil trading operation or Russian companies that want to secure an outlet for their crude oil are seen as possible buyers.

However, the big oil companies have been whittling down their presence in European refining for years and are not seen as likely buyers. ($1 = 0.7708 euros) (Reporting By Thierry Leveque and Nicolas Bertin; Writing by Muriel Boselli; Editing by Christian Plumb and Mark Potter)