'STRANGE' HEROIN BUST AT STARLITE DINER

Three plainclothes policemen walked into the Starlite Diner one evening
this week for what they said was a routine document check as part of a city
anti-terrorism operation.

They left after taking into custody the ousted director of a major vanadium
mining complex, who they said was carrying heroin in his pockets.

Dzholol Khaidarov, who is fighting to be reinstated as head of the
Urals-based Kachkanar Vanadium Mining Complex, or GOK, was arrested Tuesday
evening on suspicion of heroin possession with intent to sell in what even
prosecutors call a "strange" case.

Khaidarov remained in jail Friday. His associate Damir Gareyev f the former
GOK chairman of the board, who was removed along with Khaidarov claimed the
drugs were planted and accused Kachkanar's new managers of being behind the
arrest.

The plainclothes officers from the Interior Ministry's anti-organized crime
force entered the diner at Ploshchad Mayakovskaya with the stated purpose
of checking customers' documents.

The search was part of a citywide operation to avert terrorist acts by
Chechen rebel supporters, said Vladimir Panevezhsky of the Nikulino
district prosecutor's office.

Despite the official explanation for the check, the officers examined IDs
at only two tables, including one where Khaidarov was sitting with a
colleague, a Starlite Diner manager said. Calls to the anti-organized crime
force's press service went unanswered Friday.

After looking at Khaidarov's passport, the officers decided to check his
pockets, where they found three tiny plastic bags containing a total of 6
grams of heroin, according to prosecutor Panevezhsky, whose office is
overseeing the case.

Khaidarov was immediately arrested and taken to a Moscow detention
facility. Under the law, such a quantity of heroin is enough to charge a
suspect with intending to sell drugs in "large quantities," the prosecutor
said.

The usual dose of heroin is a half-gram. The street price in Moscow for 1
gram of heroin is about $9.

Calls to Alexander Shipayev of the Nikulino-Troparevo district police
force, who is investigating Khaidarov's case, went unanswered Friday.

Panevezhsky said formal charges have yet to be filed against Khaidarov, but
predicted the businessman would remain in prison pending trial.

The prosecutor said it seemed "strange" for such a presumably wealthy
businessman, the former head of a company generating $300 million in annual
sales, to be suspected of a drug deal involving 6 grams of heroin.

"It is strange, but a fact is a fact. th Heroin was found on him in the
presence of witnesses," the prosecutor said.

The Starlite Diner manager, who asked not to be identified, said Tuesday
was the first time in its five-year history that police officers had
entered the diner to check customers' identification.

He said that about two years ago, police officers came to the diner to
check IDs, but were asked by managers to remain outside and they examined
documents at the diner's entrance. Then, the police said they were looking
for pickpockets, the manager said.

Gareyev, the former board chairman, said the police officers planted the
heroin in the pockets of his business partner, who he said has never used
drugs.

Interviewed by Kommersant newspaper earlier this week, Gareyev said he
believes Khaidarov's arrest was part of a campaign initiated by Kachkanar
GOK's present managers, who are loyal to Sverdlovsk region Governor Eduard
Rossel. These managers are trying to prevent Khaidarov and Gareyev from
re-gaining control of the company, he said.

Reached by telephone, the company's representative in Moscow denied that
Kachkanar GOK's current management had anything to do with Khaidarov's arrest.

In addition to the heroin case, the Nikulino-Troparevo district police are
investigating another case against both Khaidarov and Gareyev.

The two are suspected of having used a false Kachkanar GOK stamp to
validate documents upon their dismissal from the company in January,
Gareyev said.

Also, prosecutors in the Sverdlovsk region are investigating two more
criminal cases against Khaidarov: one on suspicion of embezzling 400
million rubles from Kachkanar GOK and another in which he is accused of
attempted rape.

Khaidarov lost his post at Kachkanar GOK on Jan. 28 when the board of
directors abruptly met and elected Andrei Kozitsyn as the new director.
Hours later, Kozitsyn, accompanied by armed guards and police, swooped down
on the plant and took over the premises. Khaidarov at the time was
recovering from surgery at a Moscow hospital.

Khaidarov and his allies are challenging the management reshuffle in court.

Kachkanar GOK produces about 40 million metric tons of ore a year,
generating some $300 million in sales.