UPDATE 4-SocGen's Russia unit CEO charged with bribery, faces 7 years
* Rosbank CEO Vladimir Golubkov denies wrongdoing
* Faces up to seven years in jail if convicted
* Leading Russian financiers, Prokhorov, defend him
* French bank's Russia strategy questioned
By Katya Golubkova and Douglas Busvine
MOSCOW, May 16 (Reuters) - The head of Societe Generale's Russian unit Rosbank was charged with bribery on Thursday after investigators released a film of him with cash piled on his office desk in what several bankers said may have been a set-up.
The case could increase alarm among international investors and sheds a damaging light on business practices in Russia, where France's SocGen is one of the few Western banks left in a market dominated by homegrown state players.
Vladimir Golubkov, who was arrested on Wednesday, faces up to seven years in jail if convicted. His senior vice president, Tamara Polyanitsyna, was charged as an accomplice to the crime.
Golubkov, 47, was held for more than 24 hours before being arraigned at Moscow's Presnensky Court. His lawyer Dmitry Kharitonov told RIA news agency that he denied any guilt and that he had been kept in "disgraceful conditions" and was not feeling well.
Societe Generale said in an emailed statement it remained committed to Russia as a core market where it saw "strong growth potential" and was cooperating with the authorities after Golubkov's arrest.
"Societe Generale is closely monitoring the situation in its Russian subsidiary Rosbank in close cooperation with the Russian authorities," the French bank said.
RIA reported that the court would decide on Friday whether to remand Golubkov in custody or release him on bail.
Golubkov worked through the ranks at Rosbank to take the helm in 2008. One of the bank's former owners, billionaire politician Mikhail Prokhorov, expressed outrage at the investigation, saying he had petitioned the court where Golubkov was expected to be charged for him to be freed on bail.
"I know him very well," said Prokhorov, who ran on a liberal ticket against Vladimir Putin in last year's presidential election. "He was always an honourable, professional man, and I'm certain he won't hide anywhere."
Other leaders of Russia's financial community also spoke out in support of Golubkov, and said he might have been entrapped.
"The accusations simply don't fit - although the law enforcement authorities are entitled to their version and to investigate," Garegin Tosunyan, president of the Association of Russian Banks, told Reuters.
"If you ask me, it is unlikely that he would stoop to such commercial bribery. I hope that investigators will consider the possibility that he was deliberately set up."
The Interior Ministry used the increasingly common practice in high-profile cases of releasing video footage of a police raid. It showed officers with automatic weapons barging past security guards into Rosbank's headquarters in central Moscow.
The film then cut to a scene that showed Golubkov standing behind his desk, which had several wads of 5,000 rouble ($150) notes on it. The cash was said by investigators to total 5 million roubles ($160,000). Golubkov, wearing a light grey suit, looked into the camera but did not speak in the footage.
"Golubkov demanded, via his subordinate Polyanitsyna, more than $1 million from a businessman to extend the maturity and reduce the interest rate on a multi-million-dollar loan," the Investigative Committee said.
Rosbank officials declined comment on Polyanitsyna's behalf.
Rosbank moved swiftly to try to limit damage from the case, saying it was cooperating with the investigation and that First Deputy CEO Igor Antonov would replace Golubkov temporarily.
"We are disturbed and upset about what has happened," Antonov told the state-owned Rossiya 24 news channel.
He described the arrest of Golubkov as a "raid" reminiscent of the chaotic years following the collapse of the Soviet Union. "It reminds me of the good old 1990s. We haven't seen anything like it for ages," he said.
The charges are likely to lead to soul-searching at SocGen headquarters in Paris, which has reaffirmed its commitment to Russia, a market it first entered at a high price in 2006 but where it has struggled to turn a profit.
Golubkov was in charge of a turnaround strategy at Rosbank, into which SocGen's other Russian banking interests were folded in 2011. But, plagued by high costs and declining market share, Russia's ninth-largest bank lost money last year.
Western and Russian bankers say loan "facilitation" payments are common here, but rarely come to light unless someone seeking to settle a score turns to the law enforcement authorities.