Anti-corruption police looking into CEZ contracts

PRAGUE Feb 16 (Reuters) - The Czech anti-corruption police unit is investigating electricity producer CEZ on suspicion of improper dealings with a major supplier, the prosecutor's office said on Thursday.

"The police started an investigation at CEZ last November due to its procurement orders," said Stepanka Zenklova, a spokeswoman at the Prague city state attorney's office. She added that police were looking into several procurement deals at the company, but gave no further details.

A spokesman from CEZ, central Europe's biggest listed firm with market capitalisation of $22.9 billion, said police had contacted the company to get information about its deals with power plant equipment supplier Skoda Power.

CEZ, 70 percent state-owned, has been at the centre of attention in the Czech Republic since its long-term Chief Executive Martin Roman abruptly stepped down last September after a Czech newspaper accused him of having links to Skoda.

Finance Minister Miroslav Kalousek ordered an internal investigation at CEZ, which is now led by Roman's long-time ally, Daniel Benes. The internal probe found no irregularities in 39 deals between CEZ and Skoda, not related to the Volkswagen unit Skoda Auto.

CEZ has huge influence in the country of 10.5 million people, which has been nick-named CEZko by local media.

Daily Mlada fronta Dnes had printed pictures of documents allegedly showing Roman was a beneficiary of a trust that, via offshore companies, owned Skoda Power when it did business with CEZ while he was in charge.

But Roman, a smooth operator who had long kept politicians left and right on his side, has denied he had any relationship with Skoda Power, which became part of South Korea's Doosan Group in 2009. He is now the head of CEZ's supervisory board.

CEZ is now running the country's biggest-ever procurement deal to build two new reactors at the Temelin nuclear plant, a deal worth some $10 billion.

The group's stock has risen 4 percent this year, underperforming the Prague PX index that gained 9.3 percent. (Reporting by Jan Lopatka and Robert Mueller; Editing by Jon Loades-Carter)