A bank partly owned and run by Celtic's biggest shareholder is facing new investigations over claims it was used to fund the Russian-backed insurrection in Ukraine.

Latvia's Rietumu Banka, in which tax exile billionaire Dermot Desmond owns about a third of shares, has already hit the headlines after being fined for its role in French tax evasion and North Korean money-laundering.

Now the Baltic state's financial services watchdog has announced it will probe reports of a French "volunteer" seeking crowdfunding for his efforts in a breakaway part of eastern Ukraine.

The fighter, a former French army officer and tour guide called Erwan Castel, said he needed 10,000 Russian roubles a month to survive and would hand over any other funds to local authorities.

He made his crowdfunding appeal on a website of the self-declared but unrecognised Donetsk People's Republic's office in France, discovered Latvian public TV.

Latvia's Financial and Capital Market Commission confirmed it would check information in the public domain.

Rietumu Banka said that it had already looked in to claims that one of its accounts was used to fund Donetsk's offices in the EU, which, if true, would be in breach of EU sanctions.

Its spokeswoman told local media: "An investigation was carried out during which it emerged that the information was not accurate."

Some Latvian banks have come under pressure from US and EU regulators for providing accounts to "non-residents" from the former Soviet Union.

Rietumu Banka was this summer fined £1.4 million for letting its clients bust sanctions against North Korea after an FBI probe.

A watchdog in the Baltic state of Latvia found Rietumu Banka – where Mr Desmond has been a key player for more than a decade – had breached rules on both money laundering and counter terrorist financing.

The latest penalty comes as the bank and its board appeal against what is the biggest fine in French history – some £70m – imposed after a Paris court found it guilty of facilitating industrial scale tax evasion.

Prosecutors convinced the court the bank was an “indispensable link” in what they called a vast scheme to criminally evade tax led by a financier called Nadav Bensoussan, and his company, France.

Mr Desmond has consistently failed to comment on a series of scandals involving Rietumu, of which he is one of three shareholders. The entrepreneur is listed under "management" at the bank as a "member of its council". His office did not respond to requests for comment from The Herald.