Investors in VTB Seek State's Help

Shareholders of state-controlled VTB Group, the Russian bank that did this year's biggest IPO, asked the government to buy back shares that have dropped 22 percent since May.

The investors group sent a letter to Prime Minister Viktor Zubkov asking the state, VTB's majority shareholder, to repurchase the shares at 13.6 kopeks each, according to a copy of the letter posted on its web site.

President Vladimir Putin promoted the stock sale in a nationally televised speech, and it attracted money from more than 131,000 individual banking and brokerage clients. "Unqualified" investors such as workmen, retirees, doctors and teachers bought the shares in a sale, the letter said.

The VTB Minority Shareholders Association holds less than 1 percent of VTB's shares, chairman Oleg Letyagin said Thursday.

VTB's share sale was the latest of the government's so-called "people's IPOs." Individual investors waited in line as long as five hours to buy shares with cash.

With Russians' individual savings at stake, the government was expected to support the buybacks in an election year, said Julian Rimmer, head of sales trading at UralSib.

"The authorities need to do more to educate investors," said Zina Psiola, who manages a Russian equities fund at Clariden Leu. "If you have a portfolio of stocks, you sleep better, and that is what has to be explained to the public."

A VTB spokeswoman had no immediate comment on whether the bank would consider buying back shares. The bank denied reports on Aug. 23 that it would buy back stock to support the price.