Putin orders VTB to buy back shares from participants in the “people’s IPO” who trusted the state and lost money Russian Prime Minister Vladimir Putin, who is running for president, instructed the management of VTB, the country’s second-largest bank, to “look into the issue of a share buyback” from individual investors who purchased stock during the so-called people’s IPO (a mass retail share offering), which sparked a major scandal after the shares bought by ordinary citizens quickly fell in price. “If you believe that, for whatever reason, it would be better for you to exit these assets, then we can do the following: I can instruct the bank’s management to look into buying these shares back from minority shareholders so that you do not incur any losses,” RIA Novosti quoted Putin as saying in response to a question from one of the participants at the Russia-2012 forum. “Look into this issue,” the prime minister said, addressing VTB head Andrei Kostin. “All right,” Kostin replied. For his part, the VTB president estimated that buying back 110,000 shares from participants in the people’s IPO would cost 15–18 billion rubles. http://www.gazeta.ru/news/lastnews/2012/02/02/n_2189393.shtml
Wonderful. First Putin personally promoted VTB’s “people’s IPO” and urged people to put their money into it. “It’s a state bank. They won’t cheat you. It’s safe. Come on, granny, dig your savings out from under the mattress.” And now Putin, like the little horse from the joke (a reference to a Russian anecdote about helplessly saying “I just couldn’t do it”), is saying: well, I just couldn’t do it, couldn’t do it. So perhaps, along with the buyback issue, the question of the quality of the bank’s management should also be addressed? Why do the shares have to be bought back? Who is responsible for the drop in market capitalization? Who set and justified the offering price? Nobody wants to look into those questions. And I have some advice for Messrs. Putin and Kostin: if it’s unclear where to get the money for the share buyback, then I strongly suggest they look into who stole 4.5 billion rubles in the drilling rigs deal, and who caused 13 billion rubles in losses to the bank through that deal. We’ve been looking into that issue for two years already, and have established with considerable precision who stole the money, how they stole it, and where it went. Maybe someone will finally take an interest in our findings?
Tags