Mr Vladimir Putin, the Russian president, once sat on the advisory board of a property company under investigation by German authorities for alleged links to the Russian mafia.

St. Petersburg Real Estate Holding Company (SPAG), a property company listed on the German stock market, is believed to have laundered millions for the Russian mafia. Mr Putin sat on the board for seven years and stepped down three years ago on becoming president.

German federal prosecutors raided 28 apartments and offices in Hamburg, Frankfurt and Munich on Tuesday, searching for information related to SPAG, based in the town of Mörfelden-Walldorf, south of Frankfurt.

"This is like firing a shotgun into a dark barn in the hope of hitting someone," said Mr Markus Rese, chairman of SPAG, to Germany's Manager Magazine.

He confirmed that Mr Putin sat on the company's advisory board since 1992, when he was deputy mayor of St. Petersburg. However, Mr Rese said it was an "honorary" position, and that the Russian politician never visited the company premises.

Mr Putin is said to have been given a place on the board because of his close relationship with the one-time head of SPAG's Russian operations, Mr Vladimir Smirnov.

The investigation by German authorities began months after Mr Putin left the board, after the company's name emerged in a probe by the German secret service, the Bundesnachrichtendienst (BND), of money laundering in the alpine principality of Liechtenstein.

Federal authorities believe SPAG, founded in 1992, has laundered millions of dollars of Russian mafia money earned through illegal activities such as human trafficking, protection money rackets and alcohol smuggling.

Investigators believe the funds arrived at the German company after passing through a complex network of offshore accounts in countries with looser money laundering laws.

After arriving in Germany, the money was returned to Russia or invested in property.