Vladimir Putin sacks defense minister amid scandal

President Vladimir Putin fired Russia's defense minister over corruption allegations on Tuesday, the latest twist in an unfolding saga of power, money and suspected adultery at the heart of the Kremlin.

Putin announced on television that he had fired Anatoly Serdyukov, once seen as one of the president's most loyal courtiers but lately a liability amid allegations that the military sold off assets cheaply to insiders.

"Taking into consideration the situation around the Defense Ministry, in order to create conditions for an objective investigation into all matters, I have decided to remove Defense Minister Serdyukov from his post," Putin said.

Serdyukov's replacement will be Sergei Shoigu, recently named governor of the Moscow region and known as a popular and loyal Putin ally during nearly two decades as head of the Emergencies Ministry.

The defense minister wields immense power in Russia, channeling billions of dollars every year through the country's powerful defense industry, the second largest arms exporter in the world. Putin has promised to spend 23 trillion roubles ($726.30 billion) on the military by the end of the decade.

Corruption has been endemic at the defense ministry for decades. The country's top military prosecutor said last year that a fifth of the budget was stolen or embezzled.

Putin said at the televised meeting with Shoigu that he must continue "grandiose plans for the reform of the army".

Russian investigators raided the offices of Defense Ministry firm Oboronservis last month and opened an investigation into the company on suspicion that it had sold assets to commercial firms at a loss of nearly $100 million.

Russian media have been speculating for days that Serdyukov had lost Putin's support after having an extra-marital affair that infuriated Serdyukov's powerful father-in-law and patron, Viktor Zubkov, chairman of oil monopoly Gazprom.

When police raided the apartment of Serdyukov's neighbor, 33-year-old female military bureaucrat Yevgeniya Vasilieva, they found valuable paintings, rare antiques and more than 100 expensive rings.

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