Megafon battle hots up

13 Apr 2004

The Bermudan government has appointed KPMG to investigate who the beneficial owners of Ipoc International Growth Fund are, the company at the centre of the battle for control of Russian wireless operator Megafon. KPMG will probe not only Ipoc but three other funds also run by the same management company Ipoc Capital Partners, namely Com Tel Eastern, Convergence Capital and Gamma Capital. Ipoc is fighting Alpha Group for a 25.1% stake in Megafon that it believes it is entitled to and which it claims Alpha acquired illegally. Ipoc already directly owns 6% of Megafon, but is also indirectly linked to another shareholder Telecominvest (TCI), which owns a further 31%. If Ipoc wins the battle with Alpha its ownership of Megafon could rise to 62% leaving TeliaSonera with a minority 35.6% holding. At the end of 2003 Megafon had 6.18 million customers, making it the Russia’s third largest operator behind Mobile TeleSystems (MTS) and Vimpelcom.

Russia, MegaFon