American investor Michael Calvey and six other defendants in the Baring Vostok case have been released from house arrest, Russia’s Supreme Court ruled Thursday. This is the latest breakthrough in one of the most high-profile cases in the Putin era involving foreign businessmen.
Their private equity fund, Baring Vostok, has been an investor in some of Russia’s best tech companies, including Yandex and Ozon.
Calvey, the founder of Baring Vostok, and fund associates including French Philippe Delpal, were detained in February 2019, then placed under house arrest, on embezzlement charges relating to a dispute over a deal for Vostochny Bank. Their arrest under controversial charges shocked the business community in Russia and beyond. Calvey and his associates have always maintained their innocence.
In late October 2020, Calvey and Baring Vostok reached a deal with the opposing party in the corporate side of the dispute over Vostochny Bank. Under the terms of the settlement, all claims in Russian and foreign courts and all arbitrations are to be withdrawn, and Baring Vostok is to pay the amount of alleged damages — 2.54 billion rubles, or some $32 million — to their former Russian partners.
Formally, the settlement of the commercial dispute had no connection to the criminal case against the Baring Vostok executives. Almost immediately after the corporate settlement was announced, the prosecutor confirmed that the criminal case will proceed.
However, in its hearings Thursday, the Supreme Court said the circumstances under which Calvey and his associates had been placed under house arrest had “changed.” “The need for preventative measures in the form of house arrest have disappeared and is not in the interests of justice,” stated the court, as reported by news agencies TASS and RIA Novosti.
The court’s decision came as Calvey’s health had deteriorated over the past few months. In June 2020, his lawyers revealed he had a malignant tumor in his leg. While the court allowed him to seek treatment at a private hospital, his appeal for an early house arrest release was rejected. In September, Financial Times reported that investigators refused to allow Calvey to remove his electronic ankle bracelet in order to undergo an MRI scan required for cancer treatment.
In a statement issued Thursday evening, Baring Vostok said it welcomed the Supreme Court’s “long-awaited and only correct decision.”
Even though Calvey and his associates were freed from house arrest immediately after the ruling Thursday, the criminal procedure against them continues.
The Russian justice system is known for its next-to-zero rate of acquittals. Only 0.25% of all cases referred to court in 2018 ended with not-guilty verdicts.
