Police in Germany have started a nationwide search of offices and private homes connected with the second-largest construction company, Philipp Holzmann.

They are conducting an investigation into alleged fraud by former Holzmann executives, wh is said to have lead to the company nearly declaring insolvency last November.

The present management of the company, which is cooperating with the investigation, made a legal complaint after it discovered losses of over one-billion dollars on old projects.

Prosecutors say the investigation will centre on risky real estate and construction projects. The company was saved after the government offered state subsidies.

From the newsroom of the BBC World Service