CEO of Swiss firm Von Roll in German jail

ZURICH, July 28 (Reuters) - Swiss diversified manufacturing company Von Roll Group said on Sunday its chief executive Rene Luethy was in custody in Germany after being arrested while on a business trip.

It said Luethy had been accused of acting as an intermediary for transferring money between the German unit of Swiss engineering firm ABB and a municipal official in Bonn between 1996 and 1998 for confidential information concerning a proposed gas fired power station.

An ABB spokesman in Zurich said the firm had a "zero tolerance" policy regarding illegal activities, but referred the matter to ABB's German office where no one was immediately available for comment.

"The Von Roll Group very much regrets the latest development in the investigation against one of its executives and hopes that these accusations will be quickly cleared up by the German authorities. The Von Roll Group is not involved in the proceedings," Von Roll said in a statement.

Switzerland's SonntagsZeitung reported that Luethy was taken into custody during a business trip to Amsterdam on July 6 and was extradited to Germany.

Von Roll excused its CEO from exercising major managerial functions from April 1, allowing him to concentrate on his defence, Von Roll said. However, there were no plans for Luethy to step down, a Von Roll spokeswoman said on Sunday.

Von Roll - which makes steel products, pipes and valves and provides environmental engineering and waste management services - had sales of 1.6 billion Swiss francs in 2001.

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