The investigation is headed by Swiss federal prosecutor, Mr Valentin Roschacher, and his Russian counterpart, Mr Vladimir Ustinov. A Swiss document revealing details of the investigation was last week leaked to the Russian and Italian press. It alleges that Mr Borodin, a former Kremlin property manager who recruited Vladimir Putin into the Kremlin in 1996, received more than US$25 million in return for awarding refurbishment contracts to government offices, including the Kremlin.

The contracts for refurbishing the Kremlin were awarded by Mr Borodin to two Swiss-based sister companies: Mabetex, owned by a Kosovo Albanian, and Mercata Trading and Engineering, run by the Russian businessman, Mr Viktor Stolpovskikh, who also owned Lightstar Low Voltage Systems Ltd, which the HSBC account Isle of Man account was set up for. Mr Borodin's office is alleged to have paid Mercata Trading US$492 million for refurbishing the Kremlin and the Chamber of Audits in Moscow; and it seems Mercata transferred US$62.5 million to the Lightstar account.

Swiss general prosecutor, Mr Bernard Bertossa, has began a criminal investigation into charges of money-laundering. The 12-page document leaked last week lists the banks, their location, the account numbers, and the dates of the alleged transactions involved. The investigation is generally known as the "Mabetex Affair," but has been termed by the Swiss authorities as the "presidential administration Mabetex affair."

The document alleges that the $62.5m transfer to the Isle of Man account represented a bribe. The Swiss document also suggests that Mr Borodin, his daughter Ms Yekaterina Siletsky and son-inlaw, Mr Andrei Siletsky, transferred $25,609,978 to their accounts in Geneva, Nassau and Guernsey. This was carrried out in four instalments between March 1997 and August 1998. According to Swiss investigating magistrate, Mr Daniel Devaud, 'the elements collated to date show that [Mr Borodin and 13 others] may be seriously suspected of using the Swiss banking system to conceal money obtained through crimes committed in the Russian Federation. The above-mentioned persons are suspected of taking part in dishonest management of state property or state interests or of taking bribes.'

On becoming President on New Year's Eve, Vladimir Putin appointed Mr Borodin as Secretary of the Russia-Belarus Union, soon after the Swiss law officers had issued an international warrant for Mr Borodin's arrest. Mr Borodin has vigorously denied the charges and the Russian prosecutor's office has been effective in playing for time and distracting the Swiss with red tape.

The document was leaked just before Mr Roschacher's visit to Russia; it is likely that this action was the responsibility of the Swiss and could be construed as an indication of the Swiss authorities' frustration and as an attempt to put pressure on the Russians. Mr Devaud said it was sent by fax 'because of the urgency and nature of the case ... and to speed up the investigation.' But the Russian Prosecutor's Office has stated obstructively that it would not respond to documents received by fax.

It is likely that bringing a successful prosection against Mr Borodin will be problematic for the Swiss unless the Russians admit their laws have been broken and that the "commissions" paid to Mr Borodin and others were illegal. So far Mr Ustinov, appointed by Mr Putin earlier this year, has not ordered a criminal investigation. One of the questions the Swiss document contains asks the Russians to say whether 'the activities described are in breach of Russian criminal law on taking bribes and/or abusing power.'

In defence of the Russians' apparent reluctance to co-operate with the Swiss over the past year, Ruslan Tamayev, from the Russian Prosecutor's Office, was reported by Russian business newspaper Kommersant in July as saying: 'I am embarrassed to say that we still have not been able to find a common language with investigator Daniel Devaud and the Geneva prosecutor, Bernard Bertosa ... if they really wanted to arrest Borodin, they would have issued a warrant quietly, then they would have given the instruction to Interpol ... Borodin has neither diplomatic, nor deputy immunity. But as it is, they are only trying to scare him.'

With regard to finding offshore accounts in the name of Boris Yeltsin's family, Mr Tamayev said, 'the experts studied the papers for half a year, but did not find anything sensational, and you can draw your own conclusions.'