Russian court jails US investor pending fraud trial

US investor Michael Calvey, the head of investment company Baring Vostok, detained on fraud charges, attends a court hearing in Moscow's Basmanny Court on February 15, 2019. (AFP / Vasily Maximov)
Updated 17 February 2019
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Russian court jails US investor pending fraud trial

  • Michael Calvey, founder of the multi-billion-dollar investment fund Baring Vostok Capital Partners (BVCP), was placed under arrest until April 13
  • He and five others await trial on charges they embezzled $37.7 million, a charge he claimed was fabricated

MOSCOW: A Russian court on Saturday jailed the US founder of a major investment firm for two months over fraud charges he says were fabricated for use in a shareholder battle.
Michael Calvey, founder of the multi-billion-dollar investment fund Baring Vostok Capital Partners (BVCP), was placed under arrest until April 13 as he and five others await trial on charges they embezzled 2.5 billion rubles ($37.7 million).
Authorities detained four BVCP employees on Friday, including French national Phillipe Delpal.
Two other suspects include a former fund employee and someone at another firm mentioned in the probe. All six are now under pre-trial arrest.
In a statement Saturday, Baring Vostok said the claims made against its employees “have no merit.”
The case has already drawn comparisons to other high-profile probes against foreign investors in Russia, notably one against Bill Browder and the Hermitage Capital fund.
Ironically, it comes as Russia hosts a high-profile investment forum in its Black Sea city Sochi.
Calvey says he is innocent and argued in court that the probe is a bid to exert pressure on him amid a shareholder conflict within Vostochniy Bank, which he is trying to resolve in a London arbitration court.
The charges against him are intended to “pressure Baring Vostok to drop its arbitration claims in London or to obstruct the new share emission of Vostochniy Bank,” Calvey alleged according to a statement by Baring Vostok on Saturday.
Investigators say that a firm controlled by Calvey in 2017 owed 2.5 billion rubles to Vostochniy bank and paid the debt with a 59.9 percent stake in the Luxembourg company International Financial Technology Group (IFTG), which was valued at three billion rubles.
The investigators claim that IFTG’s real value was only 600,000 rubles.
The fraud claim against Calvey was filed with the FSB security service this month by Sherzod Yusupov, a minority shareholder in Vostochniy Bank, Russian agencies reported.
Baring Vostok controls more than 52 percent of Vostochniy Bank, while 32 percent is owned by Artyom Avetisyan, Russian reports said.
Calvey said in court that he and Avetisyan are tangled in a shareholder dispute, and that by filing the claim Yusupov was in fact acting on Avetisyan’s behalf.
BVCP is a veteran investor in Russia, with current and past projects that include the Internet company Yandex, online retailer Ozon.ru, several drugstore and food store chains, and Russia’s leading online classifieds service Avito.
Some Russian officials have supported Calvey, with Rosnano board chairman Anatoly Chubais calling him “one of the most respected investors” whose efforts “attracted about four billion dollars in foreign direct investment to Russia.”


Oil edges up on supply cuts, but recession fears cap market

Updated 50 min 29 sec ago
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Oil edges up on supply cuts, but recession fears cap market

  • Prices have also been driven up by US sanctions on oil exporters Iran and Venezuela
  • Manufacturing data from Asia, Europe and North America is pointing to a sharp economic slowdown

SINGAPORE: Oil prices edged up on Tuesday, lifted by supply cuts led by producer club OPEC and US sanctions against Iran and Venezuela, but signs of a sharp economic slowdown and potentially even a recession kept markets from rising further.
Brent crude oil futures were at $67.33 per barrel at 0416 GMT, up 12 cents, or 0.2 percent, from their last close.
US West Texas Intermediate (WTI) futures were at $59.26 per barrel, up 44 cents, or 0.8 percent, from their last settlement.
Oil prices have been supported for much of 2019 by efforts by the Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russia, who have pledged to withhold around 1.2 million barrels per day (bpd) of supply this year to prop up markets.
Prices have also been driven up by US sanctions on oil exporters and OPEC-members Iran and Venezuela.
Yet analysts said oil prices would likely be higher by now if it wasn’t for a spreading economic slowdown that some say could turn into a recession soon and dent fuel consumption.
“Recession risks have risen to the highest since 2008,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Manufacturing data from Asia, Europe and North America is pointing to a sharp economic slowdown.
“Global factory output growth slowed to a 1 percent rate last quarter, and indicators point to a near stall this quarter,” said JPMorgan Chase Bank.
“Outside China, Asian industry was already contracting as we turned into the New Year,” the US bank added.