Dec. 18 (Bloomberg) -- At least seven officials from Ethiopia's central bank and mining ministry were arrested after gold purchased by the bank was found to be steel and stone painted to look like the precious metal, the federal security services said.

Officials from the National Bank and Ministry of Mining have been arrested, Demshash Hailu, a spokesman for Ethiopia's federal security services said in a telephone interview from the capital, Addis Ababa, today.

Hailu declined to provide details about those arrested. Police expect to conclude the investigation in the next two weeks, he said.

The fake gold was purchased from a company between December 2005 and April 2007, and was discovered after an anonymous tip to police, the Addis Ababa-based Fortune newspaper reported Dec. 16. Four officials from the National Bank of Ethiopia, including a former head of the bank's treasury department, were arrested, the newspaper said.

About 96.5 million birr ($10.6 million) was paid by the bank for the fake gold, the newspaper reported, citing Tewolde Besrat, a law enforcement official.

Seife Desta, director of the National Bank of Ethiopia's foreign exchange and banking department, declined to comment on the arrests in a telephone interview with Bloomberg News in Addis Ababa today. Sofia Mohammed, a spokeswoman for the Ministry of Mines and Energy, also declined comment, citing the pending investigation.

To contact the reporter on this story: Jason McLure in Addis Ababa via the Johannesburg bureau on abolleurs@bloomberg.net

Last Updated: December 18, 2007 08:25 EST