Major American investor arrested in Moscow

RUSSIA / FSU POLITICS - In Brief 16 Feb 2019 by Alex Teddy
Michael Calvey (founder of Baring Vostok) has been arrested in Moscow on suspicion of fraud. Baring Vostok is a private equity group that holds USD 3.7 billion in assets. Calvey is suspected of defrauding Vostochny Bank of USD 37.5 million - Baring Vostok has a controlling share in the bank. The complaint against Calvey comes from Yusupov and Avetisyan (minority shareholders in the bank). Calvey already had a civil case against them in London for allegedly misusing the bank for fraud. Calvey has been in Russia since 1994. He is renowned for his acumen. He bought shares in the then little known Yandex in 2000 which then appreciated 500 times over. As for decades he was able to make vast sums legally it is hard to believe that he has suddenly turned to fraud. Several other figures in Baring Vostok and Vostochny Bank have also been detained on suspicion of the fraud. Some are Russian and some are not. First Collection Bureau (owned by Baring Vostok) was RUR 2.5 billion in debt. The allegation is that Calvey was aware of this and arranged the same of First Collection Bureau to Vostochny Express Bank which in effect allowed him to steal RUR 2.5 billion. Even those who are jealous of Calvey are deeply concerned about the impact his arrest will have on an already terrible investment climate. This is a corporate dispute that has turned into a criminal case. There is probably no political aspect to this. Calvey might be released after 3 days.

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