INVESTIGATORS probing the controversial $1-billion IPOC International Growth Fund have completed a report on their findings and submitted it to the Finance Ministry.

The Ministry commissioned KPMG Advisory Services to carry out the investigation into Bermuda-based IPOC and 11 affiliated companies in response to allegations that the Fund was home to the laundered proceeds of Russian corruption.

And this week the Ministry confirmed it had received the report at the end of June and strongly hinted that it would now take action to protect the island's reputation, but it did not specify further.

The statement read: "The most that the Ministry can advise at this point in time is that the report has been submitted and that the various regulatory agencies have been apprised.

"The resultant measures taken will be taken with a view to ensuring that Bermuda's national economic interests and reputation is protected.

"Given the issues that are before the various courts and the various regulatory agencies involved, at this stage no further comment can be made."

The Finance Ministry, through the Bermuda Registrar of Companies, has the power to issue a winding-up order of any Bermuda-based company if it is deemed necessary.

In a second statement yesterday, the Ministry made it clear that the report will not be made public.

". . . given the length and depth of this investigation, the Ministry confirms that there is no intention to release the report at this time in order to give the appropriate regulatory and other relevant authorities a reasonable opportunity to consider the report.

"Further to the above, given the issues that there are before the courts in a number of other jurisdictions and the number of regulatory agencies involved, no further comment can be made at this time."

The statement added that under the Companies Act, the investigation had to remain private unless the companies involved requested otherwise.

The IPOC scandal has spawned litigation in several countries and the claims of its role in alleged money laundering on behalf of Russian IT and Telecommunications Minister Leonid Reiman has dealt blows to the island's reputation as an offshore international business centre.

Even the Finance Ministry's investigation ended up in court last November, when KPMG sued an American intelligence-gathering company for $11 million, claiming that one of its employees was bribed for information. At the time news emerged of the case, in the US District Court for the District of Columbia, a source close to the defendant company Diligence claimed the investigation would "whitewash the actions of Bermuda-based companies and individuals to spare Bermuda the embarrassment of being at the centre of one of the world's biggest money laundering operations".

Finance Minister Paula Cox (pictured) vehemently denied the allegation at the time.

"There will be no form of cover-up and any necessary follow-up action will be sanctioned," Ms Cox said. "Any suggestion to the contrary would be flagrantly untrue and palpably wrong."

"We, together with the private sector, expend considerable time and energy as a jurisdiction to protect, preserve and to enhance Bermuda's position in the international market-place."

In January, the Wall Street Journal revealed that the IPOC Fund was set up as a mutual fund five years ago by a convicted fraudster.

And the newspaper alleged that the fund was effectively a holding company for around $1 billion in telecommunications assets transferred through a network of shell companies and that the scandal went all the way up to the Mr. Reiman.

The Bermuda Police Service's fraud unit, as well as the Finance Ministry, has also been investigating aspects of the IPOC Fund.

Most of the litigation surrounding the Bermuda fund was sparked by a dispute between IPOC and and LV Finance Group. The three-year legal battle has been fought over a 25 per cent stake in Megafon, Russia's third largest mobile operator.

Alfa Group bought LV's stake in Megafon in 2003, but IPOC claims it signed option agreements to obtain those same stocks back in 2001.

The dispute has sparked lawsuits in the Bahamas, the British Virgin Islands, Russia and Switzerland.

And, as reported by this newspaper in May, a tribunal in Zurich explicitly stated that Mr. Reiman amassed great personal wealth in the IPOC Fund by taking advantage of his role in public office.