,
11 tweets,
3 min read
Read on Twitter
American founder Michael Calvey and several other executives from Baring Vostok, the biggest Russia-focused private equity firm, have been arrested on fraud charges in Moscow. Calvey was one of the last Russia bulls in a very cold investment climate
ft.com/content/7b2f8d…
ft.com/content/7b2f8d…
A sign of the bad Russian investment climate - they arrested one of the top foreign investors in Russia during one of Russia’s too investment forums. Senior finance officials were totally blindsided rbc.ru/society/15/02/…
Arrested US private equity executive Michael Calvey just brought to Moscow court for his arraignment. Prosecutors say he defrauded a bank of 2.5bn rubles and want him held without bail
As if to underline how long he has been an investor here, Michael Calvey speaks much better Russian than his court-appointed translator speaks English
Prosecutors say Calvey faces at least three years in prison. Calvey flatly denies the charges. “It’s not true. Almost none of it is true,” he says.
The charges concern a related-party transaction between Vostochny Bank, which Calvey owns, and a debt collector bureau. Calvey says the complainant - Vostochny minority shareholder Sherzod Yusupov - was a negotiator on the deal and approved it in his position on the bank’s board.
Carey says the real reason for the charges is Baring Vostok’s conflict with Yusupov and his partner Artem Avetisyan over Vostochny. Baring has an arbitration claim in London alleging Y and A used the bank for more than 10 fraudulent transactions.
Vostochny’s problems deepened when it merged with Avetisyan’s bank and regulators ordered an extra 19.6bn in provisions - 85% of which was because of bad assets added in the merger, Calvey claims. That required Rbs5bn in recapitalization that A couldn’t afford, Calvey says.
Calvey claims Avetisyan and Yusupov brought the charges as leverage to drop Baring Vostok’s London fraud claims against them and increase the price per share of the new emission so they could preserve their stake in Vostochny.
“I believe in the Russian court system,” Calvey tells the judge. He says over his 25 years in Russia he has been in court many times and “the Russian court always made the correct decision.” Asks to be released to house arrest.
Michael Calvey listens as Artur Karpov, a judge well known from various @Billbrowder and @navalny sagas, orders him to be held in pre-trial detention for an extra 72 hours. 
