With its founder on trial, Baring Vostok postpones creation of new investment fund in Russia

“Baring Vostok” has postponed the creation of a sixth fund that would have made additional foreign investment available to Russian companies, the firm's spokespeople told the website The Bell. Baring Vostok said it has concerns about “contradictions between Russian and international arbitration law,” as well as uncertainty about protections for investors’ rights in Russia.

The company hasn’t disclosed the size of the planned investment fund, but the fifth fund was roughly $1.3 billion.

• In February 2019, Russian officials arrested Baring Vostok founder Michael Calvey and several of the investment fund’s top executives for alleged embezzlement. Baring Vostok has operated since 1994, in which time the company has invested $2.8 billion in 80 different projects across Russia, Ukraine, and Kazakhstan.

Wait what’s this case about?

The criminal case against Michael Calvey and other top executives at the Baring Vostok investment firm is based on allegations by minority shareholder and Vostochny Bank board member Sherzod Yusupov, who claims that Calvey and the other suspects repaid a 2.5-billion-ruble ($39.1-million) loan with shares worth just 600,000 rubles ($9,385). Calvey says Yusupov is trying to use false criminal allegations in Moscow to pressure Baring Vostok into withdrawing a lawsuit in London, where the firm is suing Artem Avetisyan, who withdrew considerable sums of money from Uniastrum Bank through dummy transactions on the eve of its merger with Vostochny Bank.