Russian President Vladimir Putin dismissed Economy Minister Alexei Ulyukayev on Tuesday over allegations he extorted a $2 million bribe from top oil producer Rosneft, a case that could expose fault lines in the Russian leader's inner circle.
Ulyukayev, a 60-year-old technocrat whose ministry oversees a politically-charged sale of state assets, is the highest-ranking Russian official to be detained while in office since the collapse of the Soviet Union in 1991.
His case heralded a possible standoff between Rosneft boss and Putin ally Igor Sechin and those in the government who have resisted Rosneft's ambitions to acquire more state assets at a time when low oil prices and Western sanctions are biting.
Such infighting risks triggering potentially destabilizing clan infighting in the run-up to a presidential election in 2018 when Putin is widely expected to run for a fourth term.
Ulyukayev, who a Moscow court ruled should be put under house arrest for two months until Jan. 15, faces up to 15 years in jail if found guilty.
Wearing a blue suit, Ulyukayev told a Moscow court he did not accept his guilt. It was in his own interests to cooperate with the investigation as he valued his reputation, he said.
The Investigative Committee, the state agency that investigates major crimes, said Ulyukayev had extorted the bribe in exchange for approving Rosneft's $5 billion purchase of a stake in mid-sized oil producer Bashneft.