A court in Germany has ordered former arms dealer Karlheinz Schreiber, a key figure in a party financing scandal surrounding former Chancellor Helmut Kohl, be kept in custody after his extradition from Canada.
Karlheinz Schreiber faces charges of tax evasion, bribery and fraud
A spokesman for the court in the southern city of Augsburg, Karl-Heinz Haeusler, said the decision was made at a closed-door hearing on Tuesday after the court found that Schreiber is a flight risk.
The 75-year-old Schreiber, a former arms industry lobbyist, arrived in Germany on Monday after losing a ten-year fight to avoid extradition from Canada.
The court on Tuesday also read out charges against the Bavarian-born businessman. They include tax evasion, bribery and being an accessory to breach of trust and fraud. Schreiber has denied all the charges, according to his lawyer.
If convicted, the former lobbyist could face a maximum sentence of up to 15 years in prison.
Politically sensitive case
Schreiber, who holds dual Canadian and German citizenship, is a central figure in a massive party slush fund scandal that rocked Chancellor Angela Merkel's conservatives a decade ago.
Schreiber is believed to have made an undeclared one million deutschmark (500,000 euros) donation to the Christian Democratic Union (CDU).
The affair ended the political career of former Chancellor Helmut Kohl, forced current Interior Minister Wolfgang Schaueble to step down as CDU chairman and paved the way for current Chancellor Angela Merkel's rise to power.
The case is considered politically sensitive because it could spell trouble for Chancellor Merkel's party with its focus on past corruption just weeks ahead of national elections on Sept 27.
The case could be a headache for Chancellor Merkel's party ahead of federal elections
It's still not clear whether the case will be heard in court before the elections. Prosecutors in Augsburg have hinted that proceedings will only begin after the polls.
On Monday, Schreiber told reporters he believed that his case had a political dimension and would affect the upcoming elections.
"The Social Democrats won three elections with my case in the past," he said, referring to the junior partner in Merkel's coalition government. "If I come now that would be the greatest thing, it would start a huge investigation and... they would think they could win the next election."
But leading members of Germany's big political parties have insisted that Schreiber's case would have no bearing on the election.
"Those who believe that they can win the federal elections on Sept 27 with Schreiber's case, are making a big mistake," Social Democratic politician Peter Danckert told German public broadcaster ARD.
Editor: Susan Houlton