Investors band together for protection
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Investors band together for protection

Dmitri Vasiliev

Minority investors in Russian companies have got their act together. Before the 1998 crisis foreigners were making enormous returns from a soaring stock market. The few that bought into problem companies, and saw their investments diluted, won the sympathy of the market but little else.

But when the blood bath began on August 17 1998 as the Russian economy went into free fall, foreign investors were spurred into action as they all got burnt. Clubbing together under the Investors Protection Association (IPA), set up in 1998 by minority investors, foreign investors are focusing on getting more independent directors onto the boards of blue-chip companies as the best way of improving Russia's appalling corporate governance record.

"Before the crisis investors used to wear pink glasses and think that Russia was like the US," says Dmitri Vasiliev, chairman of the IPA and former head of stock market watchdog the Federal Securities Commission.

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