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. Last Updated: 07/27/2016

MMM Gets Ready To Reopen Offices

MMM officials said Friday the company was preparing to reopen its offices and begin selling shares again next week, in an operation to be guided from the prison cell of the company's president, Sergei Mavrodi.


"Our offices throughout Russia will reopen Monday to sell and buy shares," Bakhyt Kilibayev, MMM spokesman and advertising director, said in an interview. "All necessary preparations are currently being made."


The decision to reopen the investment fund, whose collapse left millions of investors without their savings, was taken after Mavrodi issued "Order No. 1" from his cell in the Martoskaya Tishina prison Thursday, directing the company to resume operations Aug. 22.


Tax officials unexpectedly praised the decision, saying that the decision to reopen what is widely considered to be a pyramid scheme would help to calm investors.


"God help them to open their offices," said Nikolai Medvedev, a spokesman for Tax Police, adding that the only chance investors would have to get their money back was if MMM resumed operations. "People are tired of uncertainty." Medvedev also said that Tax Police officials "have several times suggested to Mavrodi that MMM reopen its offices."


Kilibayev said the commission set up by MMM to repay the shares of pensioners, invalids and other needy people at a pre-collapse rate of 115,000 would resume work as of August 29.


Mavrodi suspended MMM's operations on Aug. 4 when he was detained on suspicion of breaking tax regulations soon after MMM slashed its share value to 1,000 rubles (50 cents) from 125,000, robbing millions of investors.


Medvedev said Mavrodi was charged in relation to the activities of Invest Consulting, one of the divisions of MMM group of companies, while the shares were issued by the MMM joint stock company, a separate entity.


Asked if tax officials have any claims on the MMM joint stock company, Medvedev said: "We may have some, but this is a different issue. Now we are saying: 'Please, work with your shareholders.'"


Yevgeny Buchelnikov, aide to acting Finance Minister Sergei Dubinin, said in a telephone interview that his ministry had no statement to make regarding the decision by MMM management to resume operations.


He said officials at the Department of Securities and Financial Markets should be contacted for comment, but added that the officials were difficult to reach since "they were working intensively on patching up holes in security laws."


Meanwhile, an MMM representative told Interfax that the company's offices would sell shares for 1,515 rubles and buy for 1,413 rubles Monday.


While acknowledging it would be difficult for Mavrodi to manage the company from his prison cell, Kilibayev said the MMM president intended to control the firm through his lawyers.


"He cannot use a telephone, but his lawyers will provide communication between Mavrodi and his aides," he said.


Kilibayev, who created and filmed MMM's commercials, said the company planned soon to begin its new campaign.