MOSCOW, December 16. /TASS/. Moscow’s Meshchansky District Court will start hearing the embezzlement case against a founder of the Baring Vostok private equity firm, Michael Calvey, the court told TASS.

"The Meshchansky court will hold preliminary hearings into the case, to consider procedural issues and set the date when the case will be heard on merits," the court said.

The defense team said it was preparing to file several requests during the session, but did not disclose their contents. In line with the Russian law, a lawyer can request returning the case to prosecutors to have all irregularities fixed.

The court will also choose a measure of pretrial restraint for the suspects. In November, the Russian Supreme Court changed the measure of restraint for Calvey and six other defendants in the case of a 2.5 billion rubles ($32.4 mln) embezzlement from house arrest to a number of restrictions.

Baring Vostok’s case

Russia’s Investigative Committee launched a criminal case into the embezzlement of 2.5 bln rubles ($32.4 mln) from the Vostochny Bank on February 13, 2019. Michael Calvey is the key defendant in the case. According to the initial version of 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. The defense later challenged that appraisal of shares referring to lack of results of the financial expertise.

On February 15, 2019, law enforcement agencies arrested Calvey and five others in connection with the ongoing investigation: 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 160 of Russia’s Criminal Code (embezzlement committed on a large scale by an organized group).

Calvey denies all the charges and says that his prosecution is an illegal attempt of the Vostochny bank’s minority shareholders to resolve a corporate dispute.

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.