Bermuda-based Central European Media Enterprises (CME) is under investigation by US authorities who suspect the company may have bribed Ukranian officials for a television licence, according to a report in Tuesday's New York Times.

The Times' story focused on the involvement of New York resident Ronald S. Lauder, the cosmetics heir and former mayoral candidate for New York City. Mr. Lauder owns CME and serves as the company's chairman.

The Foreign Corrupt Practices Act prohibits American companies from paying bribes overseas and allegations have been made that CME paid officials $1.2 million, sent by way of International Teleservices of Belize and two Lebanese business men living in the Ukraine.

The payments were made just after Ukraine's licensing body granted a broadcast permit to CME in 1996, even though the Ukranian Parliament had decided to withhold all new licences. While discussing business opportunities in the country with a top adviser to the Ukranian president in 1995, CME was told to "go to hell".

Eventually, Mr. Lauder joined forces with Ukranian businessmen with little-known ties to the Russian mob, according to the Times. Now CME controls the Ukraine's most popular station through its 60 percent ownership of Studio 1 + 1.

According to the report, the United States attorney in Manhattan has empanelled a grand jury and issued subpoenas. Prosecutors have studied 6,000 pages of CME documents for the past year, turned over willingly by the company.

CME, whose corporate headquarters are in London, owns television stations in several Central and Eastern European countries, the Times said. Since the fall of communism, Mr. Lauder has been an active businessman in Central Europe. CME was founded in 1991 to build a media empire in the region.

As the son of Est?e, Mr. Lauder's name has helped attract attention to the case. But he is also an active member of the Republican Party who donated $100,000 to President George Bush's inauguration. He was ambassador to Austria and a senior official in the US Defence Department during the Reagan administration, according to the Times. He is also chairman of New York's Museum of Modern art and recently left the chairmanship of the Conference of Presidents of Major American Jewish Organizations, set up to influence foreign policy as it affects the Middle East.

A spokesman for Mr. Lauder told the Times that the businessmen was confident he had not violated any laws and a report by Mr. Lauder's law firm concludes that CME did not do anything illegal.

In Bermuda, CME is based in the offices of Conyers, Dill & Pearman and employs a director and a secretary. Representatives refused to comment on the company's operations here and directed enquiries to CME's public relations agency in New York.