UPDATE 2-Construction boss accused of bribing Russian minister as scandal widens

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Worst scandal to hit defence sector during Ukraine war

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Ivanov suspected of getting kickbacks, says newspaper

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Deputy defence minister maintains his innocence

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Detention comes ahead of expected government reshuffle

(Adds case details, political implications, context)

By Mark Trevelyan

April 25 (Reuters) - A third man has been detained in a bribery investigation centring on Deputy Russian Defence Minister Timur Ivanov, the Moscow court service said on Thursday.

The widening scandal is the worst to hit the defence ministry since the start of the war in Ukraine, and has gripped the political and media establishment in the run-up to a government reshuffle that President Vladimir Putin is expected to announce next month.

The court service said Alexander Fomin, the co-founder of a construction company called Olimpsitistroy, was suspected of paying bribes to Ivanov, who was detained on Tuesday, and Sergei Borodin, a close associate of Ivanov who is also in custody.

The court service said Fomin, "being in a relationship of trust with Ivanov", was suspected of providing free services to him, Borodin and others.

"Also, Fomin and other persons, acting as an organised group, contributed to Ivanov's receipt of a particularly large bribe in the form of the illegal provision of property-related services to him," it said.

Business newspaper Kommersant said investigators suspected Ivanov of receiving kickbacks from Fomin in return for helping his company win contracts worth hundreds of millions of dollars.

Ivanov, who maintains his innocence, was arrested at work on Tuesday by the Federal Security Service, the main successor to the Soviet-era KGB. He faces 15 years in jail if convicted.

There was no immediate comment from Fomin and Borodin on the matter.

Ivanov was a close ally of Defence Minister Sergei Shoigu, who risks being damaged by the scandal. State news agency TASS quoted a source as saying that Shoigu had fired Ivanov since his arrest. TASS said investigators had seized all the bank accounts and property of Ivanov and his family.

RIVALRIES

Some analysts see the affair as an attempt to weaken Shoigu and a sign of tensions and rivalries in the elite as Putin prepares to name a new government next month after being re-elected in March for another six-year term.

Shoigu, however, is expected to keep his job. Under his direction, Russian forces have regrouped and regained the initiative in Ukraine and have recorded a series of gains in the past two months.

Ivanov, who has served as deputy minister since 2016, was in charge of property management, housing, construction and mortgages at the defence ministry, whose spending has spiralled since the war began.

He had long been the subject of journalistic investigations.

Russia's Anti-Corruption Foundation, headed by late opposition leader Alexei Navalny, had alleged that Ivanov and his family lived a life of luxury including yachts, helicopters, visits to the French Riviera, purchases of diamonds and a 19th century mansion in Moscow.

Forbes magazine listed Ivanov as one of the wealthiest men in Russia's security structures. Other investigations have alleged corruption in Russia's reconstruction of the Ukrainian city of Mariupol now controlled by Russian forces. (Reporting by Mark Trevelyan Editing by Gareth Jones)