Criminal case against investor Calvey to be wrapped up

One of Russia’s most controversial criminal cases of last year, which targeted U.S. private equity firm Baring Vostok, looks set to be resolved in the next few months, according to The Bell’s sources. It is likely that Baring Vostok founder Michael Calvey and his partners will be freed in May after being found guilty by a court and given short prison sentences.

• A Moscow court transferred Tuesday the three Baring Vostok managers who remained behind bars — Ivan Zyuzin, Maksim Vladimirov, and Vagan Abgaryan — to house arrest. The two other defendants, Calvey and his partner Philippe Delpal, were moved to house arrest last year.
• The Bell spoke with two members of a group who have requested the Baring Vostok case be reviewed at the highest levels. Both said that Tuesday’s decision is a signal the whole affair will be sorted out in the coming months. One source even provided a timeline. In his opinion, a court will find the defendants guilty in May, but only impose short sentences that they will have already served, meaning they can walk free. An acquaintance of the defendants agreed with this prediction, but said a verdict is unlikely before the end of the year. Neither source thought that the court will backtrack and deem the men not guilty.
• One banker said that, for the case to be closed, there must be an upswell in support (like last spring, when Calvey was transferred to house arrest). A critical mass is already nearing. A source close to the political discussions about the case told The Bell that, in addition to Kirill Dmitriev, head of the Russian Direct Investment Fund, who came out in support of Calvey immediately after his arrest, several others have also now spoken out. These include Sberbank head German Gref; Audit Chamber head Alexey Kudrin; and Valentin Yumashev, advisor to President Vladimir Putin and a former head of the presidential administration.
• February 15 will mark exactly one year since the Baring Vostok case began. The charges followed from a shareholder conflict within Vostochny Bank, 50.01 percent of which was owned by Baring Vostok. It is believed the case was ordered by the fund’s partner in the bank, Artyom Avetisyan, a top manager at the state-owned Agency for Strategic Initiatives known for his close ties to the security services. Avetisyan is also friendly with Putin’s former advisor, Andrei Belousov, who was appointed deputy prime minister last month. Belousov has denied any involvement in the case. Since Calvey’s arrest, Baring Vostok lost its case against Avetisyan and his partners in the Russian courts, and was forced to transfer its shares in Vostochny Bank to Avetisyan.
• The criminal case against the founder of the largest U.S. fund investing in Russia was a major blow to Russia’s investment climate. Prime Minister Mikhail Mishustin’s new government, tasked with boosting economic growth and increasing investment, would welcome an end to the case. But the case cannot simply be closed and the defendants freed as this would mean the security officers involved would be humiliated, a source close to Calvey’s legal team told The Bell.

Why the world should care

If Calvey and his Baring Vostok managers finally walk free there will be rejoicing. But it will not be a victory for the rule of law. More importantly, even a happy outcome will not ensure that foreign investors are never targeted by criminal cases linked to business disputes.