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| The Supreme Court ordered eight companies related to the fund - IPOC International Growth Fund - to wind up their operations. (File photo) | |
HAMILTON, Bermuda, May 8, 2008 - A court in Bermuda has shut down the operations of an investment fund which was fined a record US$45.4 million for giving false information to authorities in the British Virgin Islands (BVI) and for perverting the course of justice.
The Supreme Court also ordered eight companies related to the fund - IPOC International Growth Fund - to wind up their operations.
Last week the Eastern Caribbean Supreme Court in the BVI confiscated over US$45 million from IPOC after it, along with locally-based companies, Lapal Limited, Albany Investment Limited and Mercury Import Limited, pleaded guilty to the charges. The court ruled that the companies had benefitted financially from their offences.
The IPOC fraud stemmed from a long-running court battle for a one-fourth stake in MegaFon, Russia's third largest mobile provider. The Caribbean court had required that the fund pay a US$40 million deposit in case it failed to prove it had a legal right to the MegaFon shares.
The prosecution had alleged that the IPOC group misled authorities about the source of the money used for the deposit.
BVI Director of Public Prosecutions Terrence Williams said that the fund was simply "a front for the laundering of proceeds of crime".
The IPOC fine may be the largest court order of its kind ever made in the Commonwealth Caribbean.
The other three companies in the case were also slapped with fines.
Lapal Limited and Mercury Import Limited were each fined US$600,000 in costs and also ordered to pay fines of US$100,000 and US$100 respectively. Albany Investment Limited was also ordered to pay costs of one million dollars and fined US$100,000.
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