The prosecutor's office charged Alexander Alexeyev, who signed off on a 5.86 billion ruble loan (worth less than $1 billion at the time) to SBS-Agro, with abuse of power following a year-long inquiry. And though not a single kopek of the loan was ever paid back, the Central Bank is defending its employee.

A Moscow court began hearing the case Monday, and a quick verdict is not expected.

Among the 20 witnesses to be questioned are Sergei Dubinin, the Central Bank chairman in August 1998, when the loan was approved, and Viktor Gerashchenko, the recently ousted Central Bank chairman who took office later that year.

On Oct. 2, 1998, the Central Bank board of directors agreed to open a credit line of 7.4 billion rubles to floundering SBS-Agro -- and Alexeyev, deputy head of the Central Bank's Moscow department, signed off.

SBS-Agro, owned by former oligarch Alexander Smolensky, received 5.86 billion rubles in a one-time transaction guaranteed by 43 regional governments before the bank folded under debts of some 50 billion rubles, including 5 billion rubles owed to household depositors.

But the bank never returned any of the money, and of the 43 regions that acted as guarantors, only the republic of Chuvashia has acknowledged its obligations.

ARKO, or the Agency for Restructuring Credit Organizations, which took over the bank at the end of 1999, repaid all creditors who were owed less than 20,000 rubles, representing 12 percent of the claims.

Despite hundreds of lawsuits, most of SBS-Agro's institutional creditors, including the European Bank for Reconstruction and Development, had to write off their losses.

Prosecutors argue that Alexeyev assessed the security of these loans "insufficiently truthfully" and that he released the money before a restructuring plan for SBS-Agro was approved.

Alexeyev refutes the allegations, saying he is not to blame and that he does not understand the essence of the case, Interfax reported.

"SBS fulfilled its obligations, which were to provide guarantees," Alexeyev was reported as saying, referring the regional guarantees.

"Also, the government does not take any responsibility for the Central Bank obligations, and vice versa."

Central Bank representatives said the loan was given for social reasons, but that it did not help keep it from bankruptcy.

Analysts doubt the official will be found guilty.

"I don't see any legal sense in proceeding with this case now," said Mikhail Matovnikov, deputy director of the Interfax Rating Agency, adding that there is no evidence that Alexeyev knowingly acted unlawfully.

"Giving a loan can only be regarded as a crime if it was misused and the person who authorized it knew and didn't react," he said.

Even if Alexeyev is found guilty, it won't help SBS-Agro creditors get their money bank, analysts said, pointing out that the Central Bank official is not the only one to blame for the misuse of money.

"We can't get that money back, but the question still remains: Who is responsible for the bankruptcy of SBS?" said Richard Hainsworth, head of RusRating Agency.

At the beginning of 1999, Smolensky registered a new bank, Pervoye OVK, which was created out of the ashes of SBS-Agro.

Pervoye took more than 45 SBS-Agro branches in Moscow well before SBS-Agro was taken over by ARKO.

"It is a shame that the person who is to blame is still in the banking business and did not seem to suffer at all from SBS's collapse," Hainsworth said, adding that "to make a scapegoat of Alexeyev is not right and won't solve anything."

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