Austrian banker in French arrest

The former head of one of Austria's biggest banks, Bank Fuer Arbeit und Wirtschaft (Bawag), has been arrested in France on fraud charges.

The Austrian Justice Ministry said French authorities had seized Helmut Elsner, Bawag's ex-general director.

Bawag has been under investigation for lending ex-Refco CEO Phillip Bennett several hundred million dollars before US brokerage filed for bankruptcy.

This year Bawag paid $675m (£361m) to settle claims surrounding Refco debts.

Deal talks

Mr Elsner, 71, was due to appear before a judge on Friday, Justice Ministry spokesman Christoph Poechinger said.

A formal request to extradite Mr Elsner back to Austria to face charges is being prepared.

Meanwhile, Refco has reached an agreement to pay all its creditors, a major move toward concluding the brokerage's near-year long Chapter 11 bankruptcy.

At a US Bankruptcy Court for the Southern District of New York, lawyers said the deal would allow secured bank lenders to recover all of the nearly $650m they lent, and bondholders would recover four-fifths of their money.

Refco has said Mr Bennett had hidden $430m of bad customer debt.

He was charged with securities fraud and is scheduled to be tried later this year.