MOSCOW, May 17 (RIA Novosti) - The Moscow City Court upheld a lower court's ruling Thursday saying that Russia's former prime minister and a 2008 presidential candidate, Mikhail Kasyanov, must return a country house to the state, a court spokeswoman said.
The court rejected the appeal by Kasyanov's lawyers.
The long-running case involves the Sosnovka-1 dacha in the west of Moscow, which a government property watchdog claims was acquired by Kasyanov illegally and must be returned to the government.
A Moscow court ruled in mid-March that Kasyanov must return Sosnovka-1 to the government and rejected his claims to compensation.
The Federal Property Agency sought some $4.1 million in damages for the 11.5-hectare (28-acre) luxury property, which it claimed was acquired at a knockdown price through a staged auction set up by Kasyanov while he was still in office.
In February 2006, the Moscow Arbitration Court invalidated the auction, but stopped short of seizing the property, ruling that the ex-premier had bought it in good faith.
Earlier reports said that in September 1996, the state property committee signed a deal with Russian oil company Evikhon, whereby the company obtained a 49-year lease for Sosnovka-1.
Evikhon subsequently sold its tenant's rights to the state company VPK Invest, which in February 2003 received authorization from the property authorities to sell the dacha.
The Sosnovka-1 plot was then sold to Amelia, a company, which resold it to Kasyanov. On February 2, 2006, the Moscow Arbitration Court invalidated the sale of Sosnovka-1 to Kasyanov, but he was not deprived of the plot as the court ruled that he had been the bona fide purchaser.
The Federal Property Agency said that those deals had resulted in the illegal acquisition of state property.
President Vladimir Putin's first prime minister in 2000-2004, Kasyanov is now the leader of the opposition Russian Popular Democratic Union, and he has officially announced that he will run in the 2008 presidential election.
He has repeatedly accused the Kremlin of clamping down on civil and political liberties.
