One of Russia’s most prominent foreign investors has been found guilty of embezzlement, a verdict which caps a legal saga that has become emblematic of the country’s reputation as an often treacherous place to do business and sparked calls for an overhaul of its judicial system.
Michael Calvey, a US citizen, was found guilty by a judge in Moscow on Thursday, who said he and his co-defendants were guilty of “abusing their positions and in an especially large amount.”
Calvey and six of his colleagues from Baring Vostok, one of Russia’s largest investors, denied the charges of defrauding a bank of Rbs2.5bn ($33m). Their supporters say the investigation was pushed without evidence by a politically connected rival over a business dispute.
The judge was set to announce the sentences later on Thursday. State prosecutors had demanded a six year suspended sentence, after arguing that the reams of documents which Calvey’s team produced indicating his innocence were proof of how successful he had been in covering up the supposed crime.
Calvey’s arrest in 2019 shocked Russia’s business community and his pre-trial jailing and trial have been criticised by prominent Russian executives and officials. They say Calvey’s case shows the need for reform of the legal system, which is commonly abused in business disputes or used to press rivals into surrendering assets.
Kremlin-connected figures including Kirill Dmitriev, head of Russia’s sovereign wealth fund, worked behind the scenes to secure Calvey’s release from detention after his arrest. Dmitriev argued that the image of keeping one of Russia’s few remaining big foreign investors in jail would be the death knell for the country’s business climate.
But president Vladimir Putin publicly backed the case and made a show of support for Baring Vostok’s opponent in the bank dispute, Artem Avetisyan, a protégé of one of the Russian president’s top economic advisers.
The charges were subsequently downgraded and Calvey was released to house arrest. But the prosecution, which culminated in Thursday’s verdict, continued regardless owing to pressure from law enforcement officials unwilling to admit that they had made a mistake, according to people close to the case.
Putin’s spokesman Dmitry Peskov said last month that while the Kremlin was watching the verdict closely, the treatment of one foreign businessman “cannot have a major influence” on the overall investor climate of the country.