Laying down the law in Russia

A SUPPLEMENT TO EUROMONEY/APRIL 1998: EASTERN EUROPE

Dmitry Vasiliev, chairman of Russia's Federal Securities Commission (FSC), smiles as he leans back and says, wryly: "There is a new principle in Russia. The shareholder is always right."

That implies foreign trust in the Russian legal system and a key task facing the government will be to bolster investor confidence. Following president Boris Yeltsin's dismissal of the entire cabinet on March 23 a new administration will take on the task. At the beginning of March, then prime minister Victor Chernomyrdin had called on the government to protect investors' rights. "This has great significance for all of us," Chernomyrdin told those sitting around the table, "because foreign investment depends on it." The occasion was one of the first formal meetings of a new commission to protect shareholders' rights. "If we do not protect shareholders' rights, they will invest elsewhere," says Vasiliev, deputy...