It was supposed to be a sweet deal that would take some of the sting out of a seemingly never-ending string of very bitter experiences.

Like nearly everything, however, connected with former financial heavyweight Inkombank, it ended being another under-the-counter transaction that educed the wrath of major foreign investors -- including Germany.

The Babayevsky plant, founded in 1804, is the oldest factory of its kind in the country.

On Tuesday, the committee assigned to locate and liquidate as many assets as it can find among Inkombank's paper rubble sold a controlling stake in Babayevsky, Russia's oldest chocolate company, to an undisclosed buyer (rumored to be either Babayevsky management or a buyer connected to City Hall) for an undisclosed sum (estimated at $24 million) -- after changing the rules at the last minute in what was supposed to be an open tender.

For foreign investors, and there are many, who are still holding out hope of retrieving some of the hundreds of millions of dollars that went missing from Inkombank in the days and weeks following Russia's debt default and devaluation in 1998, the Babayevsky sale is just the latest in a long line of frustrations.

A senior official in the government of Germany, whose guarantee agency Hermes is a major creditor of Inkombank, said by telephone from Berlin on Wednesday that Germany is "not happy" with the way the Inkombank liquidation has been handled and expressed frustration at the Russian government's refusal to help.

"This whole process has not been friendly to foreign investors from the very beginning," the official said on condition of anonymity.

"There are a lot of vested interests involved in this bankruptcy, such as the Russian government, the Central Bank and city of Moscow," the official said. "A lot of things are not going very well and it is very difficult for us to get support from other partners of the steering committee."

Moscow's Babayevsky factory is the oldest of its kind in Russia. Founded in 1804 and declared the official supplier of chocolates to the imperial court in 1889, the concern now includes factories in Chelyabinsk, Nizhny Novgorod and Novosibirsk, as well as some 50 trading houses. It has the capacity to produce 200,000 tons of chocolate a year.

In addition to Babayevsky, Inkombank at one point owned or controlled 51.6 percent of the Rot Front chocolate factory, 25.1 percent of fighter jet maker Sukhoi, 26 percent of the giant Magnitogorsk Metals Plant, a 49 percent stake in the Omsk Bacon Factory and 91.7 percent of the Novosibirsk Margarine Plant.

Inkombank, the nation's third-largest retail bank before it lost its license in 1998, wasn't officially declared bankrupt until February 2000, when its debts stood at $300 million to the federal government, $342 million to depositors, and nearly $1.4 billion to Western banks.At the time of its collapse, Inkombank had about 10,000 corporate and private shareholders, including several metallurgical enterprises, oil exporter Nafta Moskva and the European Bank for Reconstruction and Development. The biggest shareholder is natural gas monopoly Gazprom, which held a 13 percent stake in the bank.

As of Jan. 1, the last available data according to Interfax Rating Agency, Inkombank still owed $266 million to its Western creditors in loans and correspondent accounts and a further $100 million on deposit accounts of nonresidents.

A consultant Inkombank hired in August 1998 to help rescue the bank said a few months later that bank managers had stolen more than $1 billion through clever paper shuffling. This figure was confirmed last month by the Audit Chamber, after the end of a 1 1/2-year investigation, which said that Inkombank managers had transferred out of the bank $1.5 billion in assets before it declared bankruptcy.

"It has been an amazing mess for 3 1/2 years," said Kim Iskyan of Renaissance Capital.

"We view the Inkombank case as the most important and very critical among all because a lot of foreign creditors have been involved," the German official said. "We try through different channels to make it clear to the Russians that we are not happy with what is going on."

The official said that several German banks had gotten some of their losses back, but only a fraction, and there are still several companies involved in the liquidation process. "But with the Russian majority in the steering committee it is not easy to control it, and so far it has not been very friendly towards Western investors," he said.

"What is clear so far is that a lot of assets were taken from the bank, but there are still some left," the official said.

Gerd Lange, who is representing German banks on the creditor's committee, concurred, saying, "the rights of German creditors are not being respected," Vedomosti reported. "We are not informed of what is going on, we are not allowed to take part in the liquidation process."

He said several German banks are now discussing possible legal action against the sale of Babayevsky.

Analysts doubt much more, if anything, can be salvaged from Inkombank.

"There are some assets left, but no one knows how much they really cost and they're not liquid," said IRA deputy director general Mikhail Matovnikov.