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Hearts' club owner Vladimir Romanov (R) stands at his seat before their Scottish League Cup final soccer match against St Mirren at Hampden Park stadium in Glasgow, Scotland March 17, 2013. REUTERS/David Moir


VILNIUS (Reuters) - Russia has granted asylum to Lithuanian banker Vladimir Romanov, who is wanted on embezzlement charges, and has said it will not extradite him, Lithuanian prosecutors said on Monday, in a move likely to further chill relations between Moscow and Vilnius.

Romanov is the former owner of cash-strapped Scottish soccer club Hearts and the main shareholder in Ukio Bankas, which Lithuanian authorities placed in administration last year after it ran into financial trouble.

Romanov is wanted by Vilnius on charges of embezzling 25 million euros ($33 million) from the bank.

A spokeswoman for Lithuania's Prosecutor General's office said Moscow had informed Vilnius of its decision to grant Romanov asylum. She said it had given no reason for the move.

The case comes at a time of deepening tensions between NATO member Lithuania and Russia, the country's Soviet-era overlord, because of the Ukraine crisis, which has triggered the biggest chill in east-west relations since the end of the Cold War.

Lithuania is a temporary member of the U.N. Security Council and last week Russia angrily accused the small Baltic state of working with the United States and Britain to systematically cut down Russian initiatives at the United Nations.

Last year, during its stint as chair of the European Union, Lithuania played a key role in trying to persuade Ukraine to sign up to closer economic ties with the EU against Russia's wishes.

The dispute over the EU association agreement ignited pro-Western protests in Kiev and the eventual flight of Ukraine's then-president, who had been close to Moscow.

Russia's subsequent actions -- annexation of Ukraine's Crimea peninsula and support for pro-Russian separatists in eastern Ukraine -- have led Lithuania and other former Soviet-bloc countries to strengthen their security ties with NATO

The Lithuanian government had to provide 230 million euros to pay depositors at Ukio Bankas after the central bank placed the bank in administration. Lithuanian prosecutors issued an international search warrant for Romanov in August 2013.

He was arrested in Moscow in April but a Moscow court soon ordered his release, Lithuanian prosecutors said.

Ukio bank, as well as Romanov's main business vehicle, a Lithuanian company called Ukio Banko Investiciju Grupe (UBIG), are both now undergoing bankruptcy proceedings. The administrators sold the Hearts soccer club in May.

(1 US dollar = 0.7578 euro)

(Reporting by Andrius Sytas; Editing by Gareth Jones)

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