Swiss Court Rejects IPOC's Appeal over MegaFon Stake

MOSCOW, Feb 26 (Prime-Tass) -- Switzerland's Supreme Court has ruled that IPOC International Growth Fund does not have ownership rights to a 19.4% stake in Russia's third largest mobile operator MegaFon, the stake's former owner, LV Finance, said in a press release, Vedomosti business daily reported Monday.

IPOC was appealing an earlier ruling by the International Court of Arbitration of the International Chamber of Commerce in Zurich, which also rejected the fund's claim to the stake and identified Russian IT and Telecommunications Minister Leonid Reiman as the beneficiary owner of IPOC.

IPOC is unable to further appeal the ruling, LV Finance said, the daily reported.

The court in Zurich said in May 2006 that a witness, identified as Witness #7, in a lawsuit filed by IPOC with the court was the fund's beneficiary and, simultaneously, the chairman of the board at Russia's national telecom holding Svyazinvest.

Thus the court identified Reiman, who has been chairman of Svyazinvest since 2000, as the beneficial owner of IPOC.

Reiman denied any connections with IPOC following the court ruling. Danish lawyer Jeffrey Galmond has said he is the owner of IPOC. Galmond confirmed that he was aware of the Supreme Court's ruling, the daily reported.

IPOC has been engaged in court battles for a 25.1% stake in MegaFon since 2003, when Russia's Alfa Group bought CT-Mobile from LV Finance. CT-Mobile holds the 25.1% stake in MegaFon.

IPOC has claimed that it has a pre-emptive right to buy the stake from LV Finance. In 2004, a court in Geneva upheld IPOC?s claims for 22.3% of the disputed stake, which indirectly represents a 5.575% stake in MegaFon. Since then, IPOC has been seeking control over the remaining 19.42% in MegaFon.

MegaFon's shareholders are Swedish-Finnish TeliaSonera with 35.6%, Russia's Telecominvest with 31.3%, CT-Mobile, fully owned by Alfa Group, with 25.1%, and IPOC with 8%.

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Posted to the site on 26th February 2007