* OHL, Indra confirm police searches of offices
* Shares in both companies fall following searches
* OHL says made no payments to politicians
* Police say searches part of wider graft probe
(Adds details, background, share prices)
By Robert Hetz
MADRID, April 20 A Spanish High Court graft
inquiry that has led to the arrests of people linked to the
ruling People's Party widened on Thursday as police searched the
offices of construction group OHL and technology firm
Mariano Rajoy is not accused of any wrongdoing, but the
investigation is an embarrassment for the Spanish Prime Minister
who has sought to distance himself from a series of political
scandals involving kickbacks.
Dozens of politicians and executives have taken the stand as
a result and Rajoy, who holds the narrowest parliamentary
majority in the history of Spanish democracy, has been called as
a witness in a trial of members of his party suspected of
operating a slush fund, a court spokeswoman said on Tuesday.
OHL and Indra confirmed the searches and an OHL spokesman
said the company had not made any payments to politicians and
was fully cooperating with police, while an Indra spokesman
declined any further comment.
El Pais newspaper reported that the searches were linked to
the financing of the PP's Madrid branch during regional election
campaigns in 2011. A PP spokeswoman declined to comment.
News of the searches hit shares in both companies, with OHL
falling as much as 14 percent, before recovering to trade around
8 percent lower. Indra's shares lost more than 4 percent.
A police spokesman did not name the companies, saying only
that the inspections were part of the same operation which led
on Wednesday to the arrest of former Madrid regional president
Ignacio Gonzalez and 11 others.
The searches were carried out on order of the investigating
magistrate in that case, Eloy Velasco, a police spokeswoman
later said ,without giving any further information. A High Court
spokesman declined to comment.
Gonzalez, a PP member who was president of the Madrid
government between 2012 and 2015, and eleven others linked to
his administration were arrested on as part of an open
investigation into allegations including bribery and fraud.
The former local leader has not commented on his arrest and
Reuters was unable to reach him or his lawyer.
The PP said in a statement on Wednesday it rejects "any type
of corruption ... and will take the necessary measures to stop
any activity that infringes the law".
Spain's anti-establishment opposition party Podemos, which
polls within a whisker of its main rivals the Socialists, seized
on the searches to highlight links between the country's
politicians and businesses.
Podemos, which has been touring Madrid in a double-decker
bus painted with pictures representing recent political
scandals, said it was taking the bus to OHL's headquarters.
Spain has slipped to 41 in Transparency International's
Corruption Perceptions index in 2016, implying a higher level of
corruption in the Mediterranean country than Portugal and
France, but a lower one than Italy and Greece.
(Additional reporting by Rodrigo de Miguel and Sonya Dowsett;
Writing by Isla Binnie; Editing by Sonya Dowsett and Alexander