World Bulletin/News Desk

Croatian police arrested the head of the national chamber of commerce (HGK) on Tuesday on suspicion of embezzling millions of euros, local media said, as the new European Union member pressed on with a high-level anti-corruption drive.

In line with their usual practice, police declined to confirm local media reports that Nadan Vidosevic had been seized in the morning in front of his former headquarters at the local chocolate maker Kras in the Croatian capital.

All Croatian media reported his arrest. The HGK, which Vidosevic has headed for 18 years, said in a statement that it was cooperating with the police but could not comment on ongoing investigations. Vidosevic has no personal spokesperson.

Until recently, Vidosevic was also Kras's chief executive, and media say he has become one of the wealthiest people in Croatia since it became independent in 1991.

State radio said Vidosevic was suspected of diverting 32 million kuna ($5.63 million) from HGK, which is financed by fees from local companies, through an elaborate scheme based on fictitious invoices, mostly for advertising and marketing services.

Several shell companies owned by Croats and based in the Czech Republic are alleged to have withdrawn money paid by the HGK into their accounts and brought it back to Croatia in cash.

Two men who owned those companies have been arrested in the last few weeks and media said they were cooperating with the police. Vidosevic's deputy at the HGK was arrested after that. None of the men has been charged, or commented publicly on the accusations.

At the time, Vidosevic said he was unaware of any illegal activities at the HGK.

Croatia joined the EU in July, after a broad anti-graft campaign launched in 2010 met one of the conditions for it to complete accession talks.

Former prime minister Ivo Sanader has been sentenced to 10 years in jail in a case that involved the payment of bribes to Austria's Hypo Bank and the Hungarian oil and gas group MOL. He has appealed and has denied any wrongdoing.

His former HDZ party, now in opposition, is in court in the first trial of an entire political party, accused of creating slush funds to finance its electoral campaigns.