The Michael Calvey Affair Approaches Its Logical End

Two important pieces of news have come out relating to the Calvey affair in recent weeks. The first is the buzz surrounding his possible attendance at the St. Petersburg International Economic Forum (SPIEF) which took place June 6-8.

            Calvey had asked authorities to alter the terms of his house arrest so that he can attend SPIEF. He had been listed as an attendee, and the business people and reporters on the sidelines at SPIEF eagerly discussed the prospect of his arrival.

            It never happened, which is entirely logical. As the old Russian saying goes, “Every criminal must do his time, and anybody might be declared a criminal.”

            What can I say about this matter? If Calvey wanted to come to the forum simply because he’s done so in past years, then there are still a lot of things he doesn’t get about the situation in Russia. But if this was an attempt to reach an agreement with the authorities, well, why not? When you’re in his position, you take what you can get.

In previous years, Michael Calvey was a strong advocate for investing in Russia at SPIEF.

            The other piece of news concerns the most important aspect of the affair: the money. While Mike is under house arrest, his enemies are dividing up his Russian assets. That’s completely natural. That’s what he was locked up for from the beginning.

            The Arbitration Court of Amur Province made two rulings in a closed session on June 11.  In the first, Calvey’s Baring Vostok private equity fund was forced to sell off 9.99% (and thus its controlling share) in Vostochny Bank to a company owned by Calvey’s rival, Artyom Avetisyan.

            In the second ruling, the court deprived Baring Vostok of its right to file an appeal for one month. Even in Russia, the courts very rarely issue such orders. Clearly, everything is being done in a rush. Avetisyan and his friends have to hurry if they’re going to grab it all.

            And so a panel of so-called judges assembled themselves out in the wilderness of the Chinese border, closed the session to unwanted witnesses, discussed the prospect of divvying up other people’s property and made their rulings go into effect immediately. Naturally, those who carved up Calvey’s pie won’t be going home hungry. What’s remarkable here is that they’re gobbling it up so fast.

A Few Conclusions

            The American investor who did more than anyone to bring investments to Russia is still under house arrest and facing charges. The prosecution might go on for years. Right up until they get tired of it.

            The business conflict between Calvey and his rival Vostochny shareholders is being reviewed in the Arbitration Court of Amur Province in closed session, and court decisions are going into effect immediately.

            The most important part is already done. Calvey has lost Baring Vostok’s controlling share in the bank. In a short while, Vostochny will have a new board of directors which will change the rules for issuing bank stock. After that, the former owner might go free. Let him go on talking about how attractive the investment climate is in Russia.

            That’s not the worst possible outcome. Right now, Michael Calvey needs to think more about his freedom and health, and less about money that’s already gone.

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