Brexit-backer Arron Banks denies fresh allegation of Russia links

LONDON (Reuters) - British businessman Arron Banks has denied an allegation made by a former business partner that he approached Russians about investing in his diamond mines, and that the money raised went instead to his campaign to leave the European Union.

Banks, who ahead of the Brexit referendum financed Leave.EU, a campaign led by Nigel Farage, then the leader of the UK Independence Party, has faced questions in parliament about his Russia links but denied having business there.

He said the source of the new allegation, made on Channel 4 TV on Friday, was a "a bit of a fantasist" who was attempting to distract attention from a lawsuit that Banks had brought against him.

Channel 4 cited an affidavit to a South African court which said that Banks had travelled to Russia to discuss opportunities in mining.

The court papers alleged that it had "recently become apparent that the funds were in fact raised but were used by Arron Banks in other interests that he has including, but not limited to, his participation in the funding of Brexit."

Banks said he had looked at issuing a bond for his diamond mines in South Africa but decided not to proceed with it. He said that as the events had occurred before the 2015 national election, they could not have been related to the Brexit referendum which had not yet been called.

"Unless I'm a genius, real genius, how could it be to fund Brexit with Russian money, before I knew there'd even be a referendum campaign?" Banks told Reuters by phone.

He also denied taking business trips to Russia, saying: "I went to Russia in 2014 and 2015 twice, and both were family holidays."

Banks has threatened to sue the European Parliament's chief Brexit coordinator Guy Verhofstadt for defamation after Verhofstadt said Banks had colluded with Russians over Brexit.

Britain has said it has seen no evidence of Russian interference in the 2016 referendum vote to leave the European Union.

But as part of a broader inquiry into so-called fake news, lawmakers on the media committee are investigating whether Moscow tried to influence public opinion before the referendum.

Banks told the committee he had had two lunches with the Russian ambassador, but had no business interests and had done no deals in Russia.

(Reporting by Alistair Smout; Editing by Robin Pomeroy)