The Bermuda Monetary Authority has appointed KPMG to help with its probe into the fund at the heart of the battle for control of Megafon, one of Russia?s leading mobile phone companies, according to a report in the Financial Times.

The report said that KPMG?s appointment ?shows the Bermuda authorities are stepping up their inquiries? into the Ipoc International Growth Fund.

?One area they are understood to be focusing on is who the beneficial owners are of both Ipoc and its sister funds,? said the report.

The BMA is understood to have been looking into the dealings of Ipoc, a Bermuda investment scheme, and has the power, if anything untoward is found, to close it down.

But when contacted by , the BMA refused to speak to the matter, stating that it does not comment on individual cases.

Ipoc in the report defended itself, saying that it had been the victim of a smear campaign.

It said: ?We welcome this inquiry and are co-operating fully with KPMG. Ipoc has been the victim of a concerted smear campaign stemming from its refusal to give up its rightful ownership to a 25.1 percent stake in Megafon, which the Alfa Group claims to have purchased.?

Alfa Group and Ipoc have been fighting it out in a messy battle for the quarter of Megafon, which is Russia?s third largest mobile telephone company.

There are currently pending court cases relating to the matter in the British Virgin Islands, Switzerland and Stockholm.

Each side contests that they own the stake and the Russian media has been filled with the high profile case which became big news at the start of the year. And it was then that the BMA is said to have taken an interest in Ipoc with a series of Press allegations suggesting the company, which is subject to the lightest form of regulation by the BMA as an institutional scheme which does not sell to the general public, was not run properly.

A source close to the case said: ?It is a very messy case and there is a lot of money at stake. There are essentially two sets of Russian-related parties squabbling over the assets of this fund.

?No one knows how much is in the funds, but it is worth sufficient amounts to invest in QCs (Queen?s Counsels) and court cases around the world.?

The Financial Times article said it had uncovered three other funds run by the same Bermuda-based management company, Ipoc Capital Partners, which it said were also being looked at.

These are named as Com Tel Eastern, Convergence Capital and Gamma Capital. Ipoc Capital Partners refuses to disclose who the beneficial owners are, said the article.

Ipoc is fighting Mikhail Fridman?s Alfa Group for a 25 percent stake in Megafon that it believes it is entitled to and which it claims Alfa acquired illegally. Ipoc already has a six percent stake in Megafon and is linked to another Megafon shareholder, Telecominvest (TCI), which has a further 31 percent.

TCI was set up in the early 1990s with the help of Leonid Reiman before he became Russia?s telecommunications minister. It is ultimately managed by Ipoc Capital Partners because it is majority owned by a Luxembourg company called First National Holding, which itself is majority owned by Com Tel Eastern. If Ipoc wins its battle with Alfa, it and TCI?s stakes would total 62 percent, said the article.

The statement from Ipoc added: ?Without any good legal grounds to fight Ipoc?s case, our opponents? strategy seems to rely on peddling unsubstantiated smears. We are confident the Bermudan inquiry will find that they are utterly groundless.?

Alfa said: ?We bought the Megafon shares in good faith and are confident that the seller?s dispute with Ipoc will be successfully resolved.?

Alfa last month suffered a setback in the dispute when a Stockholm court of arbitration forbade it from appointing representatives to Megafon?s board.