Klaus-Peter Muller, chief executive of Commerzbank, came out fighting yesterday in an attempt to fend off a Russian money-laundering investigation that threatens to engulf Germany's third-biggest listed bank.

In a memo to staff, Mr Muller said his home had been raided by public prosecutors last Thursday, but he added: "The search naturally failed to reveal anything; nor was anything seized."

Commerzbank's involvement in the affair stems from its ownership until 2001 of First National Holding, a Luxembourg holding company, which in turn owned a stake in Telecominvest, a Russian mobile phoneoperator.

Public prosecutors are examining records relating to four Commerzbank accounts it believes may have been used to launder money relating to the affair.

Until now, Mr Muller has distanced himself from the scandal. The bank has even denied he had had any personal contact with Leonid Reiman, the current Russian telecoms minister who in the 1990s was a director of one of the state-owned Russian groups that set up Telecominvest.

Yesterday, however, Mr Muller is understood to have confirmed at least one meeting with Mr Reiman, in 1998.