BREST: French prosecutors said Thursday they were opening a preliminary investigation into a property deal involving one of President Emmanuel Macron's ministers.
Macron had on Wednesday defended Richard Ferrand, a close ally of the president, over allegations he favoured his wife in a lucrative deal with a public health insurance fund when he headed the company.
The timing of the announcement by prosecutors in the western port of Brest is embarrassing for Macron because the government is to unveil a draft law on cleaning up French politics on Thursday.
The pledge to rejuvenate France's corruption-plagued political class was one of the central planks of the campaign that swept 39-year-old centrist Macron to the presidency on May 7.
Ferrand, one of Macron's first prominent backers and formerly secretary general of the president's Republique En Marche (Republic on the Move) party, has denied any wrongdoing.
He told France Inter radio on Thursday: "I am an honest man."
The Canard Enchaine investigative newspaper reported last week that an insurance fund that Ferrand headed in his native Brittany -- where he is an MP -- agreed in 2011 to rent a building from his wife and carry out renovations that boosted its value.
Ferrand, 54-year-old minister for territorial cohesion, has dismissed the report as a "welcome present" from the media for the new government.
He says his wife made the fund the best offer and that he had no say in the matter.