The issue is currently being investigated by the German authorities following a criminal complaint from IPOC’s opponent in the dispute over IPOC’s rightful ownership of a 25.1% stake in MegaFon, Russia’s third largest mobile operator.

The Accounting Chamber of the Russian Federation scrutinised the management of OAO North-West Telecom’s state assets, which were controlled by the state and owned by OAO Telecominvest shareholders, and found that there were “no violations”. For its part, the General Prosecutor’s Office confirmed the legality of actions during the redistribution of shares, between OAO Telecominvest shareholders, from its establishment in 1994 and July 1997.

The results of the investigation by the General Prosecutor’s office in July 1997 have come to light following independent requests for information from Maxim Gorohov, General Director of Telecominvest, and Duma Deputy Nikolai Pavlov. Mr Pavlov revealed in a press conference last week that he too was a target for Alfa/LV Finance’s corrupt witness racket, following the offer of a bribe in return for Mr Pavlov’s favourable testimony to support Alfa at arbitration proceedings in Switzerland in relation to its dispute with IPOC.

At the root of the German investigations into Commerzbank and others, including IPOC, is the ongoing dispute between IPOC and Alfa Group/LV Finance. LV Finance and Alfa Group have been at the heart of a concerted smear campaign to try and block IPOC’s civil actions against them concerning a major corporate fraud to deprive IPOC of a 25.1% stake in MegaFon.

It is believed that the investigations in Germany were launched following a criminal complaint made by LV Finance. IPOC’s opponents have secured witnesses, with multi-million dollar deals to support their testimony against IPOC and others.

Vidya Sharma, an ex-employee who had been dismissed by IPOC, has a consultancy agreement to receive $1m from LV Finance to provide testimony to support its defence. Mr Sharma, one of Alfa and LV Finance’s ‘star witnesses’, has previously been exposed in the German Courts for having been prepared to sell his testimony to the highest bidder in an SEC fraud investigation. Another Alfa witness, Mr Anthony Georgiou has an agreement for $7m under which he will provide testimony to support Alfa’s defence of its actions.

Commenting, an IPOC spokesperson said:

“The allegations that the German authorities are looking into have already been considered and rejected by the Accounting Chamber in Russia and the Russian General Prosecutor’s office.

“We suspect this investigation is being stoked by allegations from witnesses who have signed multi-million pound deals to support the provision of their testimony in this dispute.

“We are confident that IPOC principals who are named in this investigation will be cleared of any wrongdoing.

“The only people who have been found guilty of any wrongdoing so far in this dispute have been IPOC’s opponents, Alfa and LV Finance, in a comprehensive victory from a respected ICC Tribunal in Geneva. We are confident that, when it is concluded, IPOC will be recognised as the rightful owner of the 25.1% stake in MegaFon.”

For further information please contact Kirsten Smart or Enda Joyce at Media Strategy in London on +44 20 7400 4480 or 07855 489 616 (mobile).

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