MOSCOW, June 20 (RAPSI) - The former executives of M2M Telematics, a subsidiary of the oil-to-telecoms conglomerate Systema are suspected of embezzling 400 million rubles ($12.3 million) from the GLONASS program, Kommersant daily reports on Thursday.

The Global Navigation Satellite System (GLONASS), which was officially launched in 1993, is the Russian counterpart to the US GPS. It provides data for the real-time positioning and speed of surface, sea and air objects to within an accuracy of one meter.

A criminal case has been opened on charges of "large-scale fraud committed by a group of individuals on the basis of previous collusion," the punishment for which is up to ten years in prison. No charges have been brought against specific M2M Telematics executives at this stage.

"According to the investigators, in 2012, M2M Telematics executives embezzled government funds allocated for a series of IT projects which were part of the GLONASS program," the newspaper reports. "The investigators believe that the IT company's management signed fake services agreements with eight subcontractors which appeared to have no workers on their payroll, no property, equipment or other resources. These companies only existed on paper. M2M transferred 380.580 million rubles to these subcontractors for work that was never carried out. The money was converted to cash and embezzled, claim the investigators."

"This case has been fabricated. There is no evidence. It is based on motives other than justice," Igor Grushelevsky, who was M2M general director in 2012, told Kommersant.

M2M telematics is a leading Russian holding company in vehicle telematics and satellite navigation based on GLONASS/GPS technologies. Its key projects include navigation and information support for the 2014 Sochi Olympics and the development of intellectual transport systems in Russian regions.

On May 16, the Moscow police reported that Synertech's management had stolen at least 85 million rubles ($2.7 million) which had been allocated to them for work on a GLONASS research project. Synertech is a joint venture of EADS Astrium and Tesat Spacecom with Russian Space Systems.

The Interior Ministry earlier reported the embezzlement of over 565 million rubles ($18 million) in federal budget funds that were allocated for GLONASS. Criminal proceedings were initiated. The ministry suspected Russian Space Systems' management of concluding research contracts with commercial organizations that had neither the equipment nor the qualified personnel to implement them.

The GLONASS program was initiated in the 1970s but underwent a radical revamp in 2001. The 24 satellites comprising the system were put into orbit by 2010 after several costly malfunctions and launch failures by carrier rockets. The program has cost 140 billion rubles ($4.4 billion) to implement to date, and its budget for 2012-2020 stands at a further 326 billion rubles ($10 billion).