Mutual dissatisfaction in France

Judicial inquiries into alleged irregularities in France's biggest student social insurance society have led to the imprisonment of the company's former lawyer, an extradition warrant for its former printer and doubts over consultancy work by a senior minister.

After accusations that Mutuelle Nationale des Etudiants de France had diversified into areas beyond the interests of its student members, Olivier Spithakis resigned in September 1998 after 15 years as director general.

MNEF, which is like a friendly society, has more than 600 staff. It provided more than 800,000 students with social security cover and health and housing services.

Alleged irregularities included embezzlement, a network of subsidiaries and cronies giving jobs to politicians and funding for political campaigns. Last year the society and its subsidiaries were investigated by bodies including the equivalent of the Audit Office, which in September reported anomalies including practices that "appear to conflict" with the group's non-profit character.

That month, a judicial inquiry began to look into reports of corruption, fraud, forgery and false documents, concentrating on links between MNEF and communications and printing companies. In January, a second inquiry started investigating fraudulent dealing with a company's assets, receiving stolen goods, fraud and relations between the society and its vast subsidiary network.

Among questions raised were the many offices and payments to officials; property investments; MNEF's ties with Vivendi (formerly Compagnie Generale des Eaux); and alleged fraud against the national health insurance fund.

In March, examining magistrates ordered the arrest of Eric Turcon, former MNEF lawyer and a childhood friend of Mr Spithakis, on charges of forgery and bribery. These are linked to the management of Efic, an MNEF printing subsidiary that closed in 1993 with a E3 million deficit. The firm was allegedly at the centre of a vast system of false accounting.

Mr Turcon organised the move to Togo of Efic's former head, Bernard Pelletier, who is now in jail in Lome awaiting probable extradition back to France.

A question hangs over a E91,468 (Pounds 6,100) consultancy fee Vivendi paid in early 1997 to Dominique Strauss-Kahn, then a lawyer and now economy minister, for which no written record can be traced.