American investor in Russia convicted of fraud

RUSSIA / FSU POLITICS - In Brief 06 Aug 2021 by Alex Teddy
Michael Calvey was found guilty on August 5. The case has transfixed the financial sector since his arrest in February 2019. He was found to have purposely issued bad loans worth USD 34 million in an acquisition deal for a Russian bank in 2015. Calvey was given a 5.5 year suspended sentence.The case involved Baring Vostok which Calvey founded and Vostochny Bank. Baring Vostok was one of Russia's most fruitful investment funds. It specialised in tech and finance startups. It invested USD 3 billion in 80 companies such as Yandex and Ozon.Prosecutors want a 6 years suspended sentence. He spent months on remand in jail and a year under house arrest. Then he was under curfew and not permitted to leave Moscow. This treatment led many to expect his acquittal. 6 co-defendants were convicted. One is French and the rest are Russian. The case is connected to a row with Artem Avetisyan's Finvision. Finvision argued it owned some of Vostochny Bank. The two parties were engaged in a legal wrangle over allegations of asset stripping made against Avetisyan. It is speculated by Calvey's friends that Avetisyan then made bogus accusations as a way to defeat Calvey. Calvey is one of the most popular Americans in Moscow. He speaks fluent Russian. There was a lot of sympathy for him. Financier were worried that the Calvey case would make it even harder to secure foreign investment. The civil case ended in 2020. Baring Vostok paid out USD 32 million. It made some think that the criminal accusations would be withdrawn. Calvey protested his innocence. He noted how many companies in Russia would not be there they are today without him. He claimed that the court disregarded a mass of exculpatory...

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