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. Last Updated: 07/27/2016

Selenga Vows to Resume Operations

A representative of the Russian House of Selenga investment company told angry investors Thursday that the company will resume operations as soon as it is granted an appropriate license, but investors expressed a different point of view.

"This is just another MMM, I'm afraid," said Tatyana, 21, a student who invested 2 million rubles in the company two months ago to raise money to pay for her wedding. "If they stop once, they never get going again."

"Look at them -- they are bandits," said Marina, 61, a pensioner as she pointed out the guards at the office doors. "Do you believe these people can return your money?"

The Russian House of Selenga, a large and heavily advertised investment company, halted operations over the weekend, citing in a statement the scandal surrounding MMM, frequent bankruptcies among financial companies and "attacks by officials on financial firms."

A Volgograd court last year ruled that the company lacked a banking license to accept investments and said Selenga's activities were illegal. Yet the company continued to operate despite the court ruling.

The company, which promised to add 5 rubles daily to every 1,000 rubles deposited, said it would resume operations when it obtained an appropriate license and would return investors' money.

This week police seized $3.3 million in cash belonging to Selenga at the Irkutsk airport on suspicion of breaking regulations governing cash transactions. Several other branches of the company have already been found guilty of violating the same regulation as well as failing to pay billions of rubles in taxes and fines, tax police said.

But the company's representative, who said he flew from company headquarters in Volgograd to Moscow to calm down investors, was optimistic about Selenga's future.

"We already applied for a license, and I do not see any reasons why authorities would not give it to us," the representative, who declined to give his name, told investors. "The company has no problems with the authorities."

Selenga said in its statement it "is ready to meet any requirements of the law." The statement praises the Russian government and President Boris Yeltsin for issuing a decree on protection of investors' interests and criticizes chinovniki, or bureaucrats, who launched an onslaught of investment companies.

Company officials have said previously that proceeds from shareholders are invested in assets of newly privatized Russian companies.

A presidential decree signed earlier this year obliged all investment companies to bring their activities in line with legal requirements. Government officials have said, however, that Russia so far lacks laws to regulate investment firms.