With Top Investor in Jail, Putin Hits at Business Climate

Natasha Doff
With Top Investor in Jail, Putin Hits at Business Climate

(Bloomberg) -- Russian President Vladimir Putin said honest business people shouldn’t have to live under “constant fear of criminal prosecution,” days after the arrest of one of the country’s top foreign investors.

Echoing previous exhortations to officials and law-enforcement to stop harassing business, which have produced few results, Putin said Wednesday in his annual state-of-the-nation address that “detention is often extended without good reason” and almost half of cases “don’t even make it to court.”

But he didn’t mention Baring Vostok Capital Partners Founder Michael Calvey, the American private equity investor who’s in pre-trial detention as the latest prominent business figure to face prosecution. While senior officials and bankers in Russia have urged Calvey’s release, Putin’s spokesman, Dmitry Peskov, said Monday the Kremlin doesn’t believe the case will hurt Russia’s investment climate, though it’s following events closely.

A Moscow court last week ordered Calvey and three colleagues held in detention until April on charges related to fraud at retail lender Vostochny Express Bank, where Baring Vostok is the biggest shareholder. They deny wrongdoing and the veteran investor says the case is related to an ongoing dispute with Artem Avetisyan, the other big shareholder in the bank.

Putin’s latest proposed solution may not be of much help to Calvey -- he suggested setting up a “special digital platform” where entrepreneurs can report threats to their businesses. The platform idea was initially put forward by the Agency for Strategic Initiatives, a Kremlin-backed policy think tank that counts Avetisyan among its senior management.

(Adds detail about Agency for Strategic Initiatives in final paragraph.)

To contact the reporter on this story: Natasha Doff in Moscow at ndoff@bloomberg.net

To contact the editors responsible for this story: Gregory L. White at gwhite64@bloomberg.net, Scott Rose

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