The Privy Council has upheld an injunction sought by Bermuda-based IPOC International Growth Fund Limit to prevent Russia?s Alfa Group from trading a 25.1 percent stake in Russian mobile operator Megafon over which IPOC also claims ownership rights.

The UK ruling follows an injunction that was awarded by the BVI Court of Appeal in October. According to the Russian News and Information Agency, the injunction will stand until the Privy Council rules on IPOC?s application for leave to appeal a British Virgin Islands (BVI) Court of Appeal ruling which rejected IPOC?s claims against LV Finance and Alfa on jurisdictional grounds.

IPOC alleges that Alfa Group knowingly struck a deal with the original owner of the stake, LV Finance, to try to sell the 25.1 stake twice in an international fraud with BVI companies at its heart.

The sale process involved a complex web of over a dozen offshore companies, several based in the British Virgin Islands, including the three Alfa subsidiaries presently holding the stake, IPOC claims.

IPOC already holds an eight percent stake Megafon and claims that it owns the disputed 25.1 percent stake because in 2001 LV Finance signed two option agreement to sell Transcontinental Mobile Investment Limited to IPOC.

TMI owned CT Mobile which held the 25.1 percent of Megafon. Alfa Group later announced the purchase of all of LV Finance?s assets and claimed the acquisition included CTM. Both parties to the dispute have well-oiled media machines and the often political battle has been waged in courtrooms and through the media around the globe.

Alfa has alleged that Leonid Reiman, Russia?s telecommunications minister, continues to stand behind Telekominvest, a company that he helped found in 1994 and which owns 31.3 per cent of MegaFon.

IPOC?s courtroom opponents also alleged that Mr. Reiman is the true beneficial owner of IPOC. It is a claim which Mr. Reiman and IPOC deny.

Alfa and LV Finance have also sought to have IPOC?s claim dismissed by alleging that IPOC is a criminal enterprise and that money which it used to fund the BVI case came from corruption and money laundering.

The allegations have prompted investigations into the role played by leading German and Swiss banks, including Commerzbank, in the alleged looting of assets from the Russian state.

The Bermuda Monetary Authority also launched an investigation of IPOC but as a matter of policy will not to comment on individual investigations.

The Financial Times however reported earlier this year: ?One area they are understood to be focusing on is who the beneficial owners are of both IPOC and its sister funds.?

If anything untoward is found, the BMA has the power to close the fund down.

?The Privy Council?s decision is another setback for Alfa. This result is the last thing our opponents wanted,? an IPOC spokesperson said in a statement.

?We believe Alfa recognises the net is closing in on them and were concerned they might have sought to sell or squirrel away this stake to hamper IPOC?s efforts to enforce its rights.?