MegaFon Names Former U.K. Minister Myners Director

OAO MegaFon (MFON) said it will appoint Paul Myners, a former U.K. Treasury minister, as an independent director, bolstering its board before a planned initial public offering in London this month.

The appointment still requires shareholder approval, MegaFon, Russia’s second-largest wireless carrier, said today in a statement. Myners also served as chairman of fund manager Gartmore Investment Management and U.K. retailer Marks & Spencer Group Plc. (MKS)

The Moscow-based company, controlled by billionaire Alisher Usmanov, is seeking $1.7 billion to $2.1 billion by selling 15 percent of its shares and is trying to reassure investors before the IPO. Goldman Sachs Group Inc. withdrew as an adviser for the IPO because of corporate governance issues, the Financial Times reported Oct. 10.

“I am sure Paul will have done a lot of due diligence prior to taking this role,” said Robert Talbut, chairman of the Association of British Insurers’ investment committee, which represents firms with 1.5 trillion pounds ($2.4 trillion) of assets. “If a company thinks they can simply buy respectability without there being genuine change, I think there will be a lot of disappointment.”

Myners’s mobile phone was turned off, and his office didn’t answer a call seeking comment.

Usmanov, MegaFon’s controlling shareholder, spent six years in a Russian jail after he was convicted in 1980 of fraud and embezzlement, the company said in its IPO prospectus. In 1989, a Soviet court expunged his record, according to the prospectus.

Myners is a former fund manager and was chairman of Guardian Media Group, publisher of the Guardian newspaper. As Treasury minister from 2008 to 2010, he helped oversee the bailout of the British banks and earned a reputation as a critic of the City, London’s financial district. His so-called Myners Report, published in 2001 as a U.K. review, became a blueprint for much of European pension-fund governance.

Morgan Stanley (MS) and OAO Sberbank (SBER) are managing MegaFon’s share sale, with help from Credit Suisse Group AG (CSGN), Citigroup Inc. (C) and VTB Capital.

To contact the reporters on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net; Jason Corcoran in Moscow at jcorcoran13@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net