MMM crash victims shown little sympathy

WHILE admitting that the government had not adequately protected the public, the Russian Prime Minister, Viktor Chernomyrdin, said yesterday that the state could not compensate investors who had risked their money in the collapsed MMM pyramid scheme. 'MMM shareholders could only be helped at the expense of those who did not buy MMM shares,' he said.

But the Prime Minister, who is acutely aware of the need to keep a tight rein on the budget if Russia is to emerge from economic crisis, was a little more sympathetic to those who believed MMM's promise of quick wealth than government officials who appeared on television on Saturday night and effectively told them they only had themselves to blame. 'Market economics means above all personal responsibility,' said the Deputy Finance Minister, Andrei Kazmin.

The more diplomatic Mr Chernomyrdin admitted that the government should have worked quicker to create a legal framework for the securities market and issued stronger warnings to investors about the dangers of MMM. 'We cannot stop people buying shares but we were obliged to explain to them what was behind this,' he said, suggesting some officials might be sacked.

The company is still not officially bankrupt and is talking of making a comeback. The government has promised that if MMM is declared bankrupt it will make sure assets are divided among shareholders.

It remains to be seen whether this will pacify the 5 million people who bought shares in MMM. Some of them went into debt to do so and others, such as pensioners and the unemployed, were literally surviving on what dividends they received. Many investors, however, far from blaming MMM's president, Sergei Mavrodi, Russia's fifth richest man, see him as a hero who has been harassed by the government.

On Saturday, thousands of shareholders camped outside MMM formed a union whose actions are as yet unpredictable.