Bermuda-based IPOC International Fund is declaring a victory in Switzerland's highest court in part of a larger international legal battle to claim control of Russia's third largest mobile phone operator. At the same time, however, a related legal suit being played out in a British Virgin Islands court has seen an expert witness testify that IPOC shows "the badges of money laundering".

IPOC International Growth Fund Ltd. says it is "an investor operating world-wide and investing in high technologies, telecommunications, media in emerging markets". IPOC says that its primary beneficial owner is Jeffrey Galmond, a Danish lawyer and longstanding investor in the Russian telecom sector, however it has been widely alleged by IPOC's courtroom opponents that the true beneficial owner is Russian Information Technology Minister Leonid Reiman. This is something Reiman and IPOC repeatedly deny.

IPOC has been battling with BVI-based LV Finance, its chairman Leaned Rozehtskin and Alfa Group over a 25.1 percent stake in mobile phone operator Megafon. Alfa Group bought the stake of MegaFon from LV Finance in 2003, however IPOC claims it had signed option agreements to obtain that same stock from LV Finance back in 2001. This week the Swiss Federal Court upheld an International Chamber of Commerce (ICC) Arbitration Tribunal decision and confirmed IPOC's right to 5.7 percent of the disputed MegaFon stake.

LV Finance had appealed the ICC decision on grounds of money laundering and allegations that the chairman of the Tribunal was biased.

LV Finance and its lawyers walked out of the Tribunal well ahead of the Swiss ruling, but IPOC says the decision now clears the way for the immediate enforcement of its rights to 5.7 percent of Megafon worth over $150 million.

IPOC also has right to more than $2.2million in legal costs that it was awarded against LV Finance.

Roland Bopp, general manager of IPOC Capital Partners, said: "The Swiss Federal Court has again confirmed what IPOC has argued all along, Alfa and LV Finance colluded in an illegal scheme to transfer the MegaFon stake in violation of IPOC's prior ownership rights.

"It is a major victory which exposes Alfa and LV Finance's illegal and disreputable business practices.

"It underlines the baseless nature of the allegations Alfa and LV Finance have recently been making against IPOC as an increasingly desperate move to come up with a defence for their illegal conduct.

"We fully expect that IPOC will continue to be vindicated in the courts and that Alfa's shameful legal strategy will fail."

The legal dispute over Megafon is being heard in several courtrooms around the world, including one in British Virgin Islands.

Both IPOC and Alfa have secured active UK-based public relations firms to ensure their sides of the story are also heard by the media.

Alfa and LV have alleged that IPOC is in essence a vehicle for money-laundering and therefore its contracts have no legal validity. While the ICC Arbitration Tribunal has rejected these allegations concerning money laundering and IPOC's beneficial ownership, the Bermuda Monetary Authority has launched its own inquiry into IPOC.

One person close to the legal battles pointed out to The Royal Gazette that if IPOC is found to be in the wrong it could discredit Bermuda as a reputable jurisdiction for offshore funds. The BMA has refused to comment on the case in the past and repeat attempts to call the BMA by telephone yesterday failed.

Last week Alfa presented Jonathan Phillips, an accountant from PricewaterhouseCoopers, as an expert witness to give an opinion to the BVI court on the testimony of IPOC owner Jeffrey Galmond.

"Much of what I have seen is consistent with the accepted characteristics of money laundering schemes," said Mr. Phillips.

The Wall Street Journal reports that Phillips deposition said the evidence provided by Galmond and by accountants Ernst & Young showed "no evidence that enables me to conclude that the structure and the funds flows are not part of a money laundering scheme as alleged."

The Journal said: "Phillips said his suspicions were aroused by the extensive use of apparent shell companies in offshore jurisdictions, making rapid successions of transactions without any apparent commercial reason. He noted, however, that the material he had been given to work with was incomplete."

An IPOC spokesperson responded: "Mr. Phillips was a legal expert employed by Alfa and, despite this, he has not been able to confirm the allegations made by their witnesses [former president and director of IPOC Vidya Sharma and British businessman Anthony Georgiou"

The spokesperson went on to tell The Royal Gazette: "You should also note that [Mr. Phillips only had access to partial evidence provided by Alfa themselves and so is in no position to make a judgment on these matters."

"The International Chamber of Commerce Tribunal, made up of three highly respected jurists has considered my clients' detailed evidence on the beneficial ownership of IPOC and its corporate structure and accepted that he is the owner. They have also rejected our opponents' money laundering allegations. They have, unlike the PWC man, seen all the evidence from both sides and back IPOC's case. I think they are a more credible judge," he said.

IPOC recently increased its direct stake in Megafon from 6.5 percent to 8 percent. IPOC indirectly owns a further stake of 31.3 percent of Megafon through a company called Telekominvest. If IPOC were to secure the contested 25.1 percent stake, it would have majority control of Megafon with the other shareholder Seden-Finnish TeliaSonera AB owning 35.6 percent of MegaFon.