澳门六合彩

BY MAXIM TRUDOLYUBOV

In a story both typical of Russian business practices and so unusual as to bring a response from Putin's key business allies, the American investor Michael Calvey and his colleagues were arrested last week on fraud charges. Calvey, his partners Vagan Abgaryan and Phillipe Delpal, the latter a French national, and three more top corporate managers will now face trial for embezzling 2.5 billion rubles ($37.7 million).

Calvey, who has lived and worked in Moscow for years, is the founder of Baring Vostok Capital Partners, a well-known private equity firm that has been investing in Russian ventures since 1994. He and partners will remain in custody for two months, a Russian court ruled.

The two parties see the conflict in fundamentally opposite ways. Russian investigators, taking their cue from a businessman who initiated a complaint against Calvey, 鈥渇raud carried out by an organized group,鈥� a criminal offense punishable in Russia by up to ten years in prison. The Baring Vostok managers and their attorneys see a conflict between shareholders and a commercial dispute. 鈥淲e have full confidence in the legality of our employees' actions and will vigorously defend their rights,鈥� the company in a statement last Friday.聽

The problem is, commercial disputes in Russia often end in showdowns in which the better-connected party manages to have a criminal case opened and its opponent jailed. In Russia, people have served long sentences and lost businesses in cases that in many other countries would normally have been resolved in arbitration courts.

Ironically, the drama around Baring Vostok was unfolding as Moscow officials were seeking to present Russia as a promising investment destination at a in the southern city of Sochi. High-profile businessmen and even managers of state-owned companies in support of Baring Vostok as a respected, long-standing player in Russia. Journalists complained of Moscow鈥檚 inability to curb the use of criminal law in business disputes.

鈥淛ust one image of Michael Calvey in court surrounded by the police is doing more to 鈥榩romote鈥� investment in Russia than all promotional videos, Instagram accounts and other media combined. Yandex, Vkusville, STS, VimpelCom, Tinkoff have all grown on Baring鈥檚 money,鈥� Elizaveta Osetinskaya, founder of the Russian independent news website The Bell, in a Facebook post, referencing some of the best-known Russian businesses unrelated to natural resources and trade in commodities.

Back in 2017, a firm controlled by Calvey paid its debt to the retail lender Vostochny Express (whose minority shareholder now claims to be defrauded) with a stake in the Luxembourg company International Financial Technology Group (IFTG). The investigators that Calvey and his 鈥渙rganized group鈥� inflated the value of IFTG. Calvey and his attorneys claim the value of the asset was fair and the investigators were misled by the complainant. The complainant鈥檚 real goal is to 鈥減ressure Baring Vostok to drop its arbitration claims in London or to obstruct the new share emission of Vostochniy Bank," Calvey , according to a statement by Baring Vostok on Saturday.

To complicate matters even further, Michael Calvey鈥檚 Baring Vostok is Vostochny Express鈥檚 majority owner, so Calvey and his colleagues would themselves be victims if a fraud had indeed taken place. The real reason for the conflict is a dispute over control of Vostochny Express between Calvey and the bank鈥檚 shareholder Artem Avetisyan, who apparently has ties to Russia鈥檚 security services, the news website The Bell last Friday.

It was a complaint filed with the Federal Security Service (FSB), the successor to the Soviet political police KGB, that got the case started. Some commentators suggested politics might have been involved, but Calvey is known for steering clear of political involvement. Unfortunately, one does not need to spy for an adversarial power to become the target of the security agencies in Russia.

Unscrupulous business people in Russia have resorted to the FSB and other siloviki (influential security agents) as a means of applying ultimate pressure in commercial disputes ever since the 1990s. Hundreds of similar cases emerge every year. The difference this time is the high profile of the defendant, a respected business leader and an American citizen committed to the Russian market.

鈥淚t is a corporate argument pure and simple. Placing entrepreneurs in cases like this under arrest is illegal,鈥� Boris Titov, the presidential commissioner for entrepreneurs' rights, in an op-ed on Monday. Titov referred in his piece to the Russian Supreme Court鈥檚 that was intended to stop Russian courts from treating commercial conflicts as criminal offenses. Titov, who is close to the Kremlin, speaks in his piece about a 鈥渓aw-enforcement resource that is for hire,鈥� and admits that all attempts to stop the practice have so far failed.

It has never been clear why the Russian government, while claiming it is committed to developing Russia鈥檚 economy, has consistently failed to curb the destructive practices that permeate the country鈥檚 business scene and create the very well-known 鈥淩ussia risk.鈥� This time it is not just Bill Browder of Hermitage Capital or opposition politicians who speak of the criminal aspect of the Russian security machine. The Kremlin鈥檚 very own advisers speak openly about it, and yet it is still there.

That the Kremlin, led by a former career security officer, is simply unable to stop rogue FSB agents from preying on Russia鈥檚 businesses is hard to believe. A tricky investment climate must thus be a feature, not a bug, of the system.聽Despite organizing numerous investment forums and that they remain committed to attracting foreign capital, the Kremlin officials are rather cool about the situation. They seem to detest the very idea of an 鈥渋nvestment climate,鈥� a set of standards imposed by some outside, 鈥淲estern鈥� authority.

They might think聽聽of their聽own resources for direct investment. So-called 鈥渟trategic industries,鈥� mainly natural resources and metals, were the first sphere聽where the Kremlin saw foreign investment as security threat. It then moved聽on聽to and聽capped foreign ownership there. The notion seems to be gaining traction as it is applied to increasingly more spheres of interest.