The government on Thursday took steps to regulate Russia's anarchic securities market as the MMM company sought to calm panic among millions of investors in its reputed pyramid scheme by promising to resume full operations on Friday.


At a cabinet meeting Thursday morning, First Deputy Prime Minister Oleg Soskovets accused government agencies of allowing the MMM debacle to occur by "splitting up responsibility for the securities market into so many parts that it is impossible to put it back together again," Interfax reported.


After spending an hour considering the MMM crisis, in which the company stopped redeeming its shares at offices throughout Moscow on Tuesday, the cabinet urged government agencies to "examine carefully the situation" on the securities market, with the prime task of looking after the interests of at least 5 million MMM investors.


The government also pledged to set up a working group headed by acting Finance Minister Sergei Dubinin to draw up a legal basis for Russia's securities market until the proper legislation can be passed by the State Duma, which is in recess until October.


At present an array of government entities is charged with overseeing the market, including the Finance Ministry, the State Anti-Trust Committee, the Central Bank and the fledgling Securities and Exchange Commission.


Defense Minister Pavel Grachev added that out of these numerous regulatory agencies, "not one is working."


The MMM panic began last week when the government warned that some of the company's shares were illegal and tax authorities announced that one of MMM's 22 divisions had failed to pay about 50 billion rubles in taxes and fines. The crisis reached its peak Tuesday when MMM offices in Moscow stopped redeeming the company's shares, which had risen in dollar value 50 times since February.


Government officials have said they have little legal basis on which to prosecute MMM's founders should the company leave its investors holding worthless shares.


Sergei Almazov, head of the State Tax Police, told the cabinet meeting that MMM was illegally transferring its investors' money abroad, calling the company's managers "a group of skilled swindlers who take advantage of imperfect legislation to bamboozle people and fill their own pockets," according to Interfax.


But Bakhyt Kilibayev, MMM spokesman and advertising director, laid the blame for his company's problems squarely on the government in an interview Thursday, saying that authorities had provoked the panic among MMM investors to eliminate what had become a powerful political force.


The government estimates that the company has 5 to 6 million shareholders, while MMM president Sergei Mavrodi claims 10 million.


Kilibayev said MMM planned to reopen its offices and vowed that the company would eventually honor all its shares at the rising rate it regularly quotes, which reached 125,000 rubles Thursday. Asked where the money would come from, Kilibayev said MMM would shift funds from others of its 22 divisions.


While admitting that there was "an element of a pyramid" in the MMM investment program, Kilibayev said Thursday that the company's divisions had investments in the country's principal industrial enterprises and that it was "actively and successfully operating on the stock market."


Kilibayev cited investments in Russia's largest automaker AvtoVAZ, jeep and van manufacturer UAZ, the gas monopoly Gazprom and the giant metal factory Norilsk Nickel.


As of Thursday afternoon, MMM shares were selling for between 55,000 and 94,000 rubles apiece. Prices rose at some exchanges on news of MMM's plans to resume operations, while at others prices fell regardless.