A veteran U.S. investment fund manager was detained in Moscow on Friday and faces fraud charges in a case that's likely to rattle the Russian business community.
Michael Calvey, founder and senior partner at Baring Vostok equity firm, was detained alongside two other fund managers in the morning, and a Moscow court is expected to rule on their arrest later Friday.
The Basmanny court said Calvey, who has been working in Russia since 1994, and five other people, including two Baring Vostok managers, face charges of fraud. The Interfax news agency cited an investigator telling the court Friday that Calvey is suspected of embezzling 2.5 billion rubles ($37 million) from Vostochny Bank, where Baring Vostok has a controlling stake.
Founder of the Baring Vostok investment fund Michael Calvey, centre, is escorted to the court room in Moscow, Russia, Friday, Feb. 15, 2019. A veteran U.S. investment fund manager has been detained in Moscow and faces fraud charges. A Moscow court said on Friday that Michael Calvey, founder and senior partner at Baring Vostok equity firm, was detained alongside two other fund managers. (AP PhotoAlexander Zemlianichenko)
Calvey, who attended his court hearing in Moscow on Friday afternoon, has long worked in Russia and invested heavily in the country's technology sector, including in the web search giant Yandex.
The charges follow a protracted dispute between Vostochny shareholders, and come as Russia is holding a major investment conference in Sochi attended by President Vladimir Putin. Russian news agencies cited Kremlin spokesman Dmitry Peskov as saying Putin did not know about Calvey's arrest.
"Baring Vostok believes that the detention of its employees and the charges that have been brought are a result of a conflict with shareholders of Vostochniy Bank," the fund said, using an alternative English spelling of the bank's name. "We have full confidence in the legality of our employees' actions and will vigorously defend their rights. Baring Vostok's activities in the Russian Federation are fully compliant with all applicable laws."
Founder of the Baring Vostok investment fund Michael Calvey sits in a cage in the court room in Moscow, Russia, Friday, Feb. 15, 2019. A veteran U.S. investment fund manager has been detained in Moscow and faces fraud charges. A Moscow court said on Friday that Michael Calvey, founder and senior partner at Baring Vostok equity firm, was detained alongside two other fund managers. (AP PhotoAlexander Zemlianichenko)
Baring Vostok added the fund is continuing to work despite the arrests.
Baring Vostok, which says it has over $3.7 billion in committed capital for its investments, began investing in Russia during the chaotic 1990s transition to capitalism after the collapse of the Soviet Union.
Its best-known investment was the 2000 acquisition of a 35.7 percent stake in the then-startup Yandex, which grew to become a giant in Russian-language internet search, advertising and commerce. By the time Baring Vostok sold its last Yandex shares in 2016, it had earned vast profits.
Founder of the Baring Vostok investment fund Michael Calvey, centre, is escorted to the court room in Moscow, Russia, Friday, Feb. 15, 2019. A veteran U.S. investment fund manager has been detained in Moscow and faces fraud charges. A Moscow court said on Friday that Michael Calvey, founder and senior partner at Baring Vostok equity firm, was detained alongside two other fund managers. (AP PhotoAlexander Zemlianichenko)
Baring Vostok's investments have tended to focus on tech companies, telecoms and retail, rather than getting involved with the state-owned giants of the oil and gas sector.
That contrasts with the strategy favored by the U.S.-born British fund manager Bill Browder, whose Hermitage Capital Management was raided by Russian authorities in 2007. Browder had often invested in state-run companies where he sought to expose alleged corruption to make them more efficient and profitable.
Browder, once a major foreign investor in Russia, ran afoul of the government in the late 2000s while investigating an alleged large-scale tax fraud scheme with his lawyer Sergei Magnitsky.
Authorities seized Browder's company, Hermitage Capital, and denied him entry to Russia. Magnitsky was thrown into a Moscow prison, where he died in 2009.
Browder has since campaigned globally for sanctions against Russian human rights violators. Russia has placed him on the Interpol wanted list.
Calvey's arrest shows that Russia is "entirely corrupt," Browder wrote on Twitter on Friday. "Of all the people I knew in Moscow, Mike played by their rules, kept his head down and never criticized the government."
PARIS (AP) — French President Emmanuel Macron warned Thursday that Europe could die if it fails to build its own robust defense as Russia’s war in Ukraine rages on, or if it fails to undertake massive trade and economic reforms to compete with China and the U.S.
Macron urged Europeans to become more ambitious in a fast-changing world to face the challenges of war, fierce trade competition, energy scarcity, climate change and increasing authoritarianism.
In a nearly two-hour speech at the Paris’s Sorbonne University, Macron said the Continent is divided and “too slow and lacks ambition” at a time when the 27-member European Union needs to become a superpower, defend its own borders and speak with one voice if it wants to survive and thrive.
“Our Europe today is mortal,” Macron said. “It can die and that depends solely on our choices,” he added. He called on people to make those choices now because, “it’s today that Europe is between war and peace.”
Russia's aggression in Ukraine, now in its third year, is an existential threat and Europe is not armed enough to defend itself when “confronted by a power like Russia that has no inhibitions, no limits,” Macron said.
‘Our ability to ensure our security is at stake," Macron said. “Russia mustn’t be allowed to win.”
France has been an firm supporter of Ukraine in its fight against Russian aggression, and Macron has often clashed with other Western leaders as he has insisted that Europe must stand by the country at any cost. Last month, the French president alarmed European leaders by saying that sending Western troops into Ukraine to shore up its defenses shouldn’t be ruled out.
Referring to trade practices of China and the U.S., Macron said “the two world powers have decided not to respect the rules of global trade” by shoring up protections and subsides while Europe’s industry remains open and is stuck in overregulation.
“Let’s do the same, we are in competition,” Macron said.
Thursday's speech comes ahead of pivotal European Parliament elections.
Macron, a avid advocate of a united and assertive Europe, also rallied support for his centrist Renaissance party ahead of the June 6-9 vote as far-right parties lead the moderate coalitions in the polls. He called for safeguarding the democratic values as the “authoritarian model” that he said was become “more popular” across the Continent.
The French president lost his majority in France’s most influential house of parliament, the National Assembly, after the 2022 election to the far-left coalition and the far-right National Rally party.
The social situation in France remains tense as Paris prepares to host the Olympic Games this summer, amid protests from teachers, police officers, and farmers in recent weeks. The protests follow huge demonstrations last year against Macron’s ultimately successful proposal to rise the retirement age.
Surk reported from Nice, France. AP correspondent Lorne Cook in Brussels contributed.
French President Emmanuel Macron delivers a speech on Europe in the amphitheater of the Sorbonne University, Thursday, April 25 in Paris. 2024. French President Emmanuel Macron will outline his vision for Europe as a more assertive global power at the backdrop of war in Ukraine, security, and economic challenges in a speech ahead of pivotal election for the European Parliament in June. (Christophe Petit Tesson, Pool via AP)
French President Emmanuel Macron delivers a speech on Europe in the amphitheater of the Sorbonne University, Thursday, April 25 in Paris. 2024. French President Emmanuel Macron will outline his vision for Europe as a more assertive global power at the backdrop of war in Ukraine, security, and economic challenges in a speech ahead of pivotal election for the European Parliament in June. (Christophe Petit Tesson, Pool via AP)
French President Emmanuel Macron delivers a speech on Europe in the amphitheater of the Sorbonne University, Thursday, April 25 in Paris. 2024. French President Emmanuel Macron will outline his vision for Europe as a more assertive global power at the backdrop of war in Ukraine, security, and economic challenges in a speech ahead of pivotal election for the European Parliament in June. (Christophe Petit Tesson, Pool via AP)
French President Emmanuel Macron delivers a speech on Europe in the amphitheater of the Sorbonne University, Thursday, April 25 in Paris. 2024. French President Emmanuel Macron will outline his vision for Europe as a more assertive global power at the backdrop of war in Ukraine, security, and economic challenges in a speech ahead of pivotal election for the European Parliament in June. (Christophe Petit Tesson, Pool via AP)
French President Emmanuel Macron delivers a speech on Europe in the amphitheater of the Sorbonne University, Thursday, April 25 in Paris. 2024. French President Emmanuel Macron will outline his vision for Europe as a more assertive global power at the backdrop of war in Ukraine, security, and economic challenges in a speech ahead of pivotal election for the European Parliament in June. (Christophe Petit Tesson, Pool via AP)
French President Emmanuel Macron delivers a speech on Europe in the amphitheater of the Sorbonne University, Thursday, April 25 in Paris. 2024. French President Emmanuel Macron will outline his vision for Europe as a more assertive global power at the backdrop of war in Ukraine, security, and economic challenges in a speech ahead of pivotal election for the European Parliament in June. (Christophe Petit Tesson, Pool via AP)
French President Emmanuel Macron arrives to deliver a speech on Europe in the amphitheater of the Sorbonne University, Thursday, April 25 in Paris. 2024. French President Emmanuel Macron will outline his vision for Europe as a more assertive global power at the backdrop of war in Ukraine, security, and economic challenges in a speech ahead of pivotal election for the European Parliament in June. (Christophe Petit Tesson, Pool via AP)
French President Emmanuel Macron delivers a speech on Europe in the amphitheater of the Sorbonne University, Thursday, April 25 in Paris. 2024. French President Emmanuel Macron will outline his vision for Europe as a more assertive global power at the backdrop of war in Ukraine, security, and economic challenges in a speech ahead of pivotal election for the European Parliament in June. (Christophe Petit Tesson, Pool via AP)
French President Emmanuel Macron delivers a speech on Europe in the amphitheater of the Sorbonne University, Thursday, April 25 in Paris. 2024. French President Emmanuel Macron will outline his vision for Europe as a more assertive global power at the backdrop of war in Ukraine, security, and economic challenges in a speech ahead of pivotal election for the European Parliament in June. (Christophe Petit Tesson, Pool via AP)
French President Emmanuel Macron speaks during a media conference at an EU summit in Brussels, Thursday, April 18, 2024. European Union leaders on Wednesday debated a new "European Competitiveness Deal" aimed at helping the 27-nation bloc close the gap with Chinese and American rivals amid fears the region's industries will otherwise be left behind for good. (AP Photo/Omar Havana)
