MOSCOW, February 26. /TASS/. Founder of Baring Vostok equity firm Michael Calvey, who was arrested on charges of embezzling 2.5 bln rubles ($37.5 mln) from Vostochny Bank, should be released on bail, Russian business ombudsman Boris Titov told reporters.

"We will insist on changing the measure of restraint for Calvey. For Calvey, who has about 100,000 jobs in the companies he represents there is a serious threat to withdraw from the management - the whole top management has been cut off. Therefore, we do not need house arrest, but some other measure [of restraint] so that he could still manage them [companies]. In this regard, we will ask for the release on bail. For this purpose we have created a pledge fund, which is based on the funds that entrepreneurs will collect," he said.

According to Titov, detention as the measure of restraint for Calvey was taken by the court incorrectly.

"We will do our best to ensure that the court decides on letting him out on bail. If we believe that Calvey is such an American capitalist, than being a capitalist he will never run away from his pledge," the ombudsman noted.

He also recalled that the appeal against the court’s decision to choose detention as a measure of restraint for Calvey will be considered in the Moscow City Court on Thursday.

Baring Vostok’s case

Russia’s Investigative Committee launched a criminal case into the embezzlement of 2.5 bln rubles ($37.5 mln) from Vostochny Bank on February 13. Michael Calvey is the key defendant in the case. On February 15, the law enforcement agencies arrested Calvey and five others: Vagan Abgaryan, partner at Baring Vostok, Philippe Delpale, an investment partner for the financial industry sector at Baring Vostok, Ivan Zyuzin, Investment Director at Baring Vostok and also General Director of the First Collection Bureau Maxim Vladimirov and Advisor to the Management Board of Norvik Bank, Alexey Kordichev. They are all facing charges under part 4 article 159 of Russia’s Criminal Code (Swindling committed on a large scale by an organized group).

According to the investigation, Calvey and his accomplices put together a scheme, where the "First Collection Bureau", under their control, waived its right to a 59.9% stake in a Luxembourg-based company called the International Financial Technology Group (IFTG), to the Vostochny bank to pay it back for a 2.5 billion-ruble debt. Before the deal, IFTG’s shares were valued at 3 bln rubles. However, the investigation is examining another estimate of 600,000 rubles (according to a Cyprus-based company’s valuation). That said, the Central Bank claimed that the price of these shares was close to zero, the investigator noted.

On February 7, Serzod Yusupov, a minority shareholder in Vostochny Bank filed a complaint with Russia’s Federal Security Service (FSB). In addition, Artyom Avetisyan, another Vostochny shareholder, along with the deputy chairman of the bank’s board Konstantin Rogov testified against Michael Calvey.

Calvey rejected all charges and accused Yusupov and Avetisyan of a conjuring up bogus charges caused by a "corporate conflict" in the bank.

About Baring Vostok

Baring Vostok is one of the largest private equity firms focusing on Russia and the CIS with $3.7 bln in capital. Since 1994, the fund has poured more than $2.4 bln of investments into 70 projects in the areas of financial services, oil and gas, telecommunications and media, and into the consumer sector. Baring Vostok’s projects include CTC Media, Yandex, Avito, Ozon, ER-Telecom, 1C, and Novomet.