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    Michael Calvey, the Baring Vostok investment company’s founder and member of the Vostochny Bank's board of directors

    Moscow Court Detains Baring Vostok Founder on Suspicions of Investment Fraud

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    MOSCOW (Sputnik) - The founder of Baring Vostok Capital Partners, US national Michael Calvey, and five other people were detained in Moscow over suspected large-scale fraud, according to the records of a Moscow court.

    Calvey was detained on Friday on suspicions of embezzling 2.5 billion rubles ($38 million) from Vostochny Bank, something Calvey has denied. Late on the same day, a Moscow court ruled to detain Calvey for three days while other defendants in the case were arrested. Calvey, in turn, asked the court to release him on bail of 5 million rubles ($75,000).

    Calvey has linked the criminal case against him with his corporate conflict with other co-owner of the Vostochny Bank, Artyom Avetisyan. Baring Vostok said earlier in a statement the detention of its employees was the result of a shareholder conflict around the Vostochny Bank.

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    "Baring Vostok believes these charges are related solely to an ongoing commercial dispute related to Orient Express, a Baring Vostok Fund portfolio company, and they do not relate to Baring Vostok as a whole, or any other Baring Vostok Fund portfolio companies. Baring Vostok and all the Funds' portfolio companies, including Vostochny Express Bank, continue to operate business as usual", the company's statement said.

    According to the Basmanny court, the list of detained persons includes along with Calvey Baring Vostok's Investment Director Ivan Zyuzin, Industry Partner for the financial industry sector Phillipe Delpal and Partner Vagan Abgaryan. Two more detainees are not employees of the Baring Vostok company.

    Kremlin spokesman Dmitry Peskov said Friday that Russian President Vladimir Putin has been informed about the detention of Baring Vostok investment company founder. "Yes [Putin has been informed]", Peskov told reporters in response to a relevant question.

    A State Department spokesperson told Sputnik earlier on Friday the US authorities were aware that an American citizen was detained in Russia, however, cannot divulge details due to privacy considerations.

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    The detention of Michael Calvey in Russia will be a powerful sign for other foreign investors who will get it in a matter of seconds, Boris Titov, the Russian business ombudsman, said in an interview with the RBK broadcaster.

    "Baring Vostok has been working in Russia for years. And in the course of these years, it has won the reputation of a fair investor. Such a reaction on the part of law enforcement is, of course, a very strong signal for foreign investors. And this signal will be understood in a matter of seconds", Titov said Friday.

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    According to media reports, Michael Calvey moved to Moscow from London in 1990s to lead a Russian-oriented direct capital investment fund. In an interview published in 2005 with newspaper Vedomosti, cited by RIA, Michael Calvey said that operations of his investment company strictly based on the principles of law, stressing that he nor his company or its staffers have never trespassed either violated the law.

    Currently, the Baring Vostok funds "have over $3.7 billion of committed capital […] Since 1994 the Funds invested over $2.8 million in 80 companies in Russia" and other CIS countries, according to the company's data.

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    Tags:
    corporate conflict, investments, detention, Vostochny Bank, Baring Vostok, Michael Calvey, Boris Titov, Russia
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