Romania’s Prime Minister was charged with forging documents and serving as an accessory to tax evasion and money laundering, further tarnishing the image of the former communist country as it struggles to shake off a reputation for corruption.

Prosecutors said they had named the 42-year-old Victor Ponta as a defendant on Monday in a five-week long criminal investigation, and temporarily seized control of his assets.

He denies wrongdoing, and says the case is politically motivated.

Financial markets shrugged off the development, which for now stops short of a formal indictment that would send the case to trial.

But it represents a new setback for Romania’s efforts to clean up politics, business and the judiciary under pressure from the EU, which it joined in 2007.

Its reputation for corruption has deterred foreign investment, and even its anti-graft efforts have had the unintended effect of slowing decision-making and delaying important contracts.

Ponta said on Sunday he was stepping down as leader of his leftist PSD party until the investigation was completed, but has made clear he will not resign as prime minister despite calls from President Klaus Iohannis for him to quit.

The investigation began on June 5 and focuses on Ponta’s activities as a lawyer from 2007-2009.

“Prosecutors ordered a stepping-up of the penal action against the defendant Ponta, a lawyer at the time of the deeds … on charges of forgery of documents – 17 counts – accessory to tax evasion… and money laundering,” the DNA anti-corruption prosecutors said in a statement.

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