Fund Loses $45.5M in Phone Suit

SAN JUAN, Puerto Rico -- A Caribbean court has issued a $45.5 million confiscation order against a Bermuda fund that was involved in a long-running dispute over a blocking stake in MegaFon, the British Virgin Islands' state-run news agency said.

The Eastern Caribbean Supreme Court in the British Virgin Islands issued the judgment Thursday against IPOC International Growth Fund, which pleaded guilty to providing false information and perverting the course of justice. A lawyer for the Bermuda-registered mutual fund said it had furnished false information to the Caribbean court regarding the sources of a $40 million security deposit, the news service said.

A British lawyer representing the fund, Andrew Mitchell, said Sunday by e-mail that court rules prohibited him from commenting on the case.

The fraud by IPOC occurred during the court battle for a 25 percent stake in MegaFon. The Caribbean court had required IPOC to pay the deposit in case it failed to prove it had a legal right to the MegaFon shares.

Prosecutor Terrence Williams said the hefty confiscation order demonstrated the territory's commitment to preventing the islands' corporate vehicles from being used improperly.

The fund alleged that it lost a 25.1 percent stake in MegaFon when Mikhail Fridman's Alfa Group induced IPOC to pay millions, only to misappropriate the money and transfer the ownership interest to Fridman and associates.