BERLIN, GERMANY - GERMANY'S richest woman, the media-shy Susanne Klatten, was in the spotlight on Monday after reports alleged a former lover had tried to blackmail her using videos of their steamy hotel room encounters.

Ms Klatten, 46, who with stakes in automaker BMW and chemicals giant Altana is reputed to have a personal fortune of 7.8 billion euros (S$14.7 billion), first met Swiss national Helg Sgarbi in mid-2007 at a hotel bar, German and Italian press reports said.

The blonde mother-of-three appears to have fallen for the 41-year-old Mr Sgarbi's charms, meeting for illicit rendezvous over the coming weeks including in room 629 at a Holiday Inn in the southern German city of Munich, according to the Bild daily.

He is then alleged to have claimed to be on the run from gangsters for running over the child of a US mafia member and have asked Ms Klatten for US$7.5 million (S$11.02 million).

She appears to have believed his story, handing over the money to Mr Sgarbi, all in 200-euro notes, in the basement garage of a hotel in Sept 2007, before ending the relationship, the reports said.

But there was another person in room 629 at the Holiday Inn in Munich, one Ernani Barretta, Mr Sgarbi's Italian accomplice, armed with a video camera, according to Italian media.

Mr Sgarbi allegedly demanded as much as 40 million euros from Ms Klatten not to release the compromising footage, sending her a letter and DVD in Dec to show what he had, newspapers said.

The billionnairess agreed to meet Mr Sgarbi a month later at a shopping centre in Tirol on Jan 14 this year to hand over the money. But instead of going herself, she sent the police.

For now, Ms Klatten has remained silent, and Munich prosecutors confirming to AFP on Sunday only that Mr Sgarbi was in custody and that an investigation had been ongoing 'for several months.'

Dark-haired Mr Sgarbi, a tall, reportedly charming former Swiss army officer who speaks eight languages, has spent time in prison, Italian news reports said.

Mr Barretta, meanwhile, whose wife was involved in the alleged extortion, was charged in the mid-1990s with fraud and extortion after posing as a faith healer and charging ailing women tens of thousands to cure them, according to Swiss newspaper SonntagsBlick.

Ms Susanne Klatten is the daughter of Mr Herbert Quandt, the German industrialist who saved BMW from collapse in 1957 and built the Bavarian automaker into one of the country's most successful firms.

When he died in 1982 aged 72, he left his considerable fortune to his widow Johanna Quandt and his children Stefan and Susanne, who changed her surname to Klatten after marrying in 1990. -- AFP