Police grill Total CEO in Iran corruption probe

By Thierry Leveque and Marie Maitre

PARIS (Reuters) - The head of oil group Total SA, France's biggest listed company, is being questioned by police investigating alleged corruption in Iran, a spokesman for the company said on Wednesday.

Chief Financial Officer Robert Castaigne and Philippe Boisseau, who oversees the group's gas and power business, were also being interviewed, a police source told Reuters.

Total declined to confirm this information.

Christophe de Margerie, who became chief executive at Total last month, has been under investigation for several months by French judges over corruption allegations linked to the Iraqi oil-for-food program and a gas project in Iran.

The Total spokesman said the hearing of de Margerie, and two other unnamed executives, related to an investigation opened in December 2006 into the South Pars natural gas project in Iran.

Two unnamed former Total executives have also been invited for questioning on Wednesday, the police source said.

"Total is confident in the fact that (the) investigation will establish the absence of any illegal activities and hopes that it will be conducted with serenity," Total said in a statement, renewing its "full support" for the three.

The Paris prosecutors' office opened an investigation into the contract, signed in 1997, following the discovery of 95 million Swiss francs ($78.32 million) in the Swiss bank accounts of an intermediary, a judicial source said in December.

De Margerie headed Total's Middle East operations from 1995 to 1999, and then oversaw the group's global exploration and production activities. He succeeded Thierry Desmarest as chief executive last month.

Last October, he was put under formal investigation by a French judge over oil purchases made under the United Nations oil-for-food program in Iraq, after being held in custody for 48 hours and then released.

It is common practice in France for a suspect to be held for questioning, after which the judge may or may not file formal charges.

AWAITING OUTCOME

On February 14, a day after he was confirmed in his new post, de Margerie told a news conference: "I would like to underline it's just an inquiry and there has been no outcome. I am calmly waiting for that."

Total shares in Paris were almost flat at 50.02 euros at 1214 GMT, while the DJ Stoxx European oil and gas sector index was up 0.3 percent.

"We know there is a risk. Investors are waiting to see how things develop and if these developments go against Total, then this would certainty pressure the stock," said an analyst, who asked not to be named.