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MegaFon seeks IPO investors with governance pledge

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* Says board will reflect importance of corporate governance

* Statement comes after Goldman drops out

* UKLA declines comment

* Sale of 15 pct stake could raise $2 bln - sources

By Megan Davies

MOSCOW, Oct 11 (Reuters) - MegaFon said the make-up of itsboard would reflect its focus on good corporate governance, asit sought to attract investors for its planned initial publicoffering (IPO) after Goldman Sachs dropped out as anunderwriter.

The emailed statement came days after Russia's No.2 mobileoperator revealed the surprise absence of the U.S. investmentbank in the line-up of banks running the deal. Sources hadpreviously said Goldman would be one of the lead banks.

"We believe we can be an attractive new possibility forinternational investors," MegaFon said a statement in reactionto being asked why Goldman was no longer involved.

"Corporate governance is very important to MegaFon," thestatement said, adding the make-up of the company's board wouldreflect this.

The group's majority shareholder Alisher Usmanov would berepresented by a minority of three board directors, and themajority would be made up of two independent directors and tworepresentatives of Nordic telecoms group Teliasonera ,which owns 35.6 percent, it said.

Sources in Moscow financial circles struggled to explainGoldman's surprise withdrawal from the IPO. One source familiarwith the situation said on Tuesday that Goldman had stepped backdue to unspecified shareholding concerns that were not relatedto Usmanov.

In a recent interview with Reuters, Uzbek-born tycoonUsmanov said he would fold his stake in MegaFon and otherassets, such as iron ore miner Metalloinvest , into anew holding company.

The company, Usmanov said, would be co-owned by his partnersFarhad Moshiri, with whom Usmanov owns a stake in London soccerclub Arsenal, and Vladimir Skoch, father of billionaire Russianlawmaker Andrei Skoch, who helped build up Metalloinvest, theworld's biggest iron ore company.

However, other sources familiar with the IPO planningdismissed suggestions that Goldman's exit could have beentriggered by comments by Usmanov about how he would consolidatehis business empire, noting the broad outline of his plans hadbeen known since April.

Another source familiar with the situation said Goldman hadsimply failed to be picked for the final line-up.

Goldman declined to comment. GOOD INTEREST

Pre-marketing for the stock offering was continuing andmeeting good interest, although some prospective investors wereasking questions about Goldman's withdrawal, a source also said.

MegaFon may place a 15 percent stake, worth around $2billion, with TeliaSonera reducing its stake and MegaFon sellingtreasury stock.

The IPO's prospectus is still to be signed off by Britishregulatory authority UKLA. The UKLA signs off on a prospectus -used to market shares to investors - before a company lists,giving its approval that it is satisfied a company has met thelisting criteria, according to a source familiar with the rules.

Among the things that the UKLA examines are shareholderstructure and ownership. Any particular concerns are typicallylisted in the "risks" section of the prospectus.

"It is too early in the process at this stage and as withany offering the price range prospectus will only be approvedand published by the UKLA nearer the launch of the offering,"said MegaFon in an emailed statement, when asked if it hadreceived sign-off for the prospectus.

The UKLA declined to comment.

Goldman ranks joint second with Morgan Stanley forRussia-related equity deals for 2012 so far, behind CreditSuisse at number one, according to Thomson Reuters data. Itranks second for M&A when measured by Russian targets, and 18thfor debt capital market bookrunning.

MegaFon plans to sell shares in London this year. Theinitial public offering could value MegaFon at $13 billion andbecome the biggest by a Russian company since that of internetfirm Yandex last year.

Morgan Stanley and Sberbank were appointedjoint coordinators to MegaFon's IPO with Citi , CreditSuisse and VTB as joint bookrunners.

(Reporting By Megan Davies; Additional Reporting by DouglasBusvine; Editing by Helen Massy-Beresford)

((megan.davies@thomsonreuters.com)(+7 916 391 8262))

Keywords: RUSSIA MEGAFON/