Michael Calvey

Michael Calvey (born October 3, 1967) is an American businessman.

Michael Calvey
Born (1967-10-03) October 3, 1967[1]
Wisconsin
OccupationEntrepreneur, investor
Known forCo-founder and managing partner of Baring Vostok Capital Partners

He is the co-founder of Baring Vostok, the largest independent private equity firm focused on investments in Russia and the Commonwealth of Independent States.[2] Calvey has been described as a longstanding proponent of investment opportunities in Russia.[3][4] Anatoly Chubais, a former Russian Deputy Prime Minister and a key figure in Russia’s post-Soviet market reforms, credited Calvey with personally attracting billions of dollars of investment into the country.[5]

In February 2019, Calvey and five colleagues were arrested on suspicion of involvement in the thieft of 2.5 billion rubles from Vostochny Bank. Calvey said the allegations were unfounded and linked the criminal investigsation against him to a corporate dispute he had with other shareholders of Vostochny Bank. Later the shareholders entered into a settlement agreement[6] and publicly stated that their shareholder dispute was not related to the criminal investigation.[7][8] After signing the settlement agreement, Baring Vostok returned 2.5 billion rubles to Vostochny Bank.[9]

In August 2021, after nearly two years under house arrest, Calvey was found guilty of misappropriation and given a 5.5-year suspended sentence by a Moscow court.[10] Observers have called the sentence a victory under the circumstances, with sources including Russia’s business ombudsman Boris Titov saying the decision was an attempt by Russian law enforcement to “save face."[11][12][13]

Biography

Michael Calvey was born in 1967 in Wisconsin and grew up in Oklahoma.[14] He has Bachelor of Business degree from the University of Oklahoma and Master of Finance degree from the London School of Economics.[1] He worked on mergers and acquisitions at Salomon Brothers and managed the investment projects in Central and Eastern Europe and Soviet Union in the European Bank for Reconstruction and Development.[15] In an interview, Calvey revealed that his interest in Eastern Europe emerged after the collapse of the Berlin Wall in 1989. Calvey noted, the 1991 Soviet coup d'état attempt took place just a week before he started working in Russia.[16][17]

Baring Vostok Capital Partners

Calvey co-founded Baring Vostok in 1994, with the firm becoming known for making early-stage investments in Russian companies largely from the tech and consumer-facing sectors.[2][18] As of 2019, Baring Vostok launched 6 funds totaling $3.7 billion.[19] By 2021, the firm has reportedly invested almost $3 billion in 80 companies, including some of Russia’s most valuable technology companies such as Tinkoff, Ozon,[20] FGI Wireless (Beeline), CTC Media, Avito.ru, 1C Company, Ivi.ru, and CarPrice.[21] In Russia, Baring Vostok was best knows for its investment in Yandex: the fund returned over $1 billion from the initial purchase of 35% share in 2020 for $5.28 million.[19]

According to Bloomberg, "Calvey became a legend in the Russian market, in part because of his reputed aversion to any kind of foul play and focus on industries and companies unlikely to attract the attention of Russia’s authorities."[22]

Baring Vostok Case

Calvey was arrested on 14 February 2019, with three other Baring Vostok executives, on suspicion of allegedly embezzling 2.5 billion rubles (US$38 million) from the Russian Vostochny Bank.[17][23] On 21 February, Russian state prosecutors formally charged him with fraud.[24] The criminal case was initiated on the basis of a statement from Sherzod Yusupov, a minority shareholder of Vostochny Bank.[25][26] As of February 2019, Calvey's Baring Vostok had a majority stake of 52.5% in Vostochny Bank.[17]

Calvey argued that the allegations were unfounded and linked the criminal investigation against him to a corporate dispute he had with other Eastern Bank shareholders. Later, the shareholders entered into a settlement agreement,[6] and publicly stated that their shareholder dispute was not related to the criminal investigation.[7]

Calvey was held in Seaman's Silence Prison, the facility notorious for poor conditions and treatment — it is the same prison where lawyer Sergei Magnitsky was detained and died under mysterious circumstances.[17] Likewise, Calvey's case was assigned to Arthur Karpov, the same judge who prosecuted Magnitsky. U.S. government officials under both the Trump and Biden administrations commented publicly that the case was a commercial dispute that shouldn’t be resolved in criminal courts, and that the arrest of Calvey was a major barrier to improving U.S.-Russian business relations.[27][28][29]

In April 2019, Calvey was released to a restricted form of house arrest, although a number of colleagues remained in prison. It was reported that Putin had personally taken the case "under his control", though Putin acknowledged "the law is the law" implying he was not in control.[30] House arrest was lifted in December 2020 and replaced with other restrictions.[31]

In August 2021, Michael Calvey was found guilty of misappropriating 2.5 billion rubles by the Meshchansky district court of Moscow. He was sentenced to 5.5 years of probation and did not go to jail. During the term of Calvey’s suspended sentence, he is allowed to travel but is required to register monthly with the Federal Penal Enforcement Service of Russia, and will not be allowed to change his permanent place of residence without informing Russian authorities.[32] The colleagues of Michael Calvey were sentenced to 3.5 - 5 years of probation.[33] A couple of weeks after, Michael Calvey and his colleagues appealed the decision.[34] In January 2022, the general Court of the second Appeal cancelled vacating measure of restraining order by the decision of the Meshchansky district court of Moscow, due to cassational appeal, for Michael Calvey, now able to leave home and travel abroad.[35]

Relatives

Michael Calvey's elder brother Kevin Calvey is a Republican politician, an Oklahoma County Commissioner, a member of the Oklahoma House of Representatives from 1998 to 2006 and from 2014 to 2018.[36]

References
  1. "«Самый честный инвестор в Россию»: кто такой Майкл Калви и за что его арестовали" [The most honest investor: Michael Calvey and the reasons behind his arrest] (in Russian). Esquire. 18 February 2019. Retrieved 12 February 2022.
  2. Reid, David (2019-02-25). "Putin is asked to take 'personal control' of legal case against jailed US investor". CNBC. Retrieved 2021-10-20.
  3. Kramer, Andrew E. (2021-08-06). "Russia Doesn't Send U.S. Investor to Jail but Still Sends a Warning". The New York Times. ISSN 0362-4331. Retrieved 2021-10-19.
  4. "The arrest of Michael Calvey, an American investor, shocks Russia's business community". The Economist. 2019-02-16. ISSN 0013-0613. Retrieved 2021-10-19.
  5. Grove, Alan Cullison and Thomas (2019-07-31). "'Last Man Standing': An American Investor in Russia Takes a Fall". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-10-19.
  6. Pavel Kazarnovsky (28 October 2020). "Baring Vostok and Avetisyan's company settled the conflict over Vostochny bank". RBC. Retrieved 15 April 2022.
  7. "Vostochny bank's shareholders just settled the corporate dispute". BFM. 28 October 2020. Retrieved 15 April 2022.
  8. Pavel Kazarnovsky (29 October 2020). "Peaceful settlement versus criminal prosecution". RBC. Retrieved 1 April 2022.
  9. "Debt collection agency related to Calvey's case returned 2.5 bil rubles to Vostochny bank". TASS. 9 November 2020. Retrieved 15 April 2022.
  10. Sergeev, Lev; Marrow, Alexander (2021-08-07). "Russia hands U.S. investor Calvey 5.5-year suspended sentence". Reuters. Retrieved 2021-10-19.
  11. Simmons, Ann M. (2021-08-06). "Michael Calvey Given 5½-Year Suspended Sentence for Embezzlement in Russia". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-10-19.
  12. Seddon, Max; Foy, Henry (2021-08-02). "Michael Calvey trial set to conclude as Russian court delivers verdict". Financial Times. Retrieved 2021-10-19.
  13. "Moscow court issues 5.5-year suspended sentence for fund manager Calvey". intellinews.com. 2021-08-08. Retrieved 2021-10-19.
  14. "U.S. investor Calvey tells court: Find me innocent and Russia will get billions in investment". Reuters. July 19, 2021. Retrieved February 12, 2022.
  15. "Майкл Калви" [Michael Calvey] (in Russian). Finparty. Retrieved February 12, 2022.
  16. Nikita Kamitdinov (February 21, 2019). "Из Оклахомы в «Матросскую тишину». Глава Baring Vostok Майкл Калви — о своей судьбе, России и бизнесе" [From Oklakhoma to Matrosskaya Tishina. Baring Vostok managing partner Michael Calvey about Russia, business, and his own fortunes] (in Russian). Inc. Retrieved February 12, 2022.
  17. Amy Knight (March 4, 2019). "The Price of Doing Business in Russia: Prison". New York Review of Books. Retrieved March 4, 2019.
  18. Seddon, Max (2019-02-22). "Committed Russia investor Michael Calvey tripped up by politics". Financial Times. Retrieved 2021-10-20.
  19. "«Я не знаю такого бизнесмена»: чиновники о задержании основателя Baring Vostok" ["I know no businessman by this name": Russian officials on the arrest of Baring Vostok founder] (in Russian). The Bell. February 15, 2019. Retrieved February 12, 2022.
  20. Times, The Moscow (2021-08-05). "Russian Court Finds U.S. Investor Calvey Guilty of Embezzlement". The Moscow Times. Retrieved 2021-10-20.
  21. Semyon Belousov (February 18, 2019). "Baring Vostok. История успеха? И кратко о солидарности" [Baring Vostok. Success story and the story of no solidarity] (in Russian). VC.ru. Retrieved February 12, 2022.
  22. Leonid Bershidsky (February 18, 2019). "Why Russia Can Afford to Jail U.S. Investors". Bloomberg. Retrieved March 4, 2019.
  23. "Russia charges US investor with fraud in high-profile case". BBC. 21 February 2019. Retrieved 2 September 2019.
  24. "Russia charges top U.S. investor Michael Calvey with fraud". Reuters. 21 February 2019. Retrieved 2 September 2019.
  25. "What's Behind the Arrest of the U.S. Founder of a Major Private Equity Group in Russia?". The Moscow Times. 15 February 2019. Retrieved 15 April 2022.
  26. ""A mere embezzlement". Vostochny bank's shareholder Sherzod Yusupov about corporate conflict with Baring Vostok". TASS. 28 February 2019. Retrieved 15 April 2022.
  27. "U.S. Ambassador Slams 'Egregious' Charges Against Journalists In Russia". RadioFreeEurope/RadioLiberty. Retrieved 2021-11-05.
  28. "Statement by U.S. Ambassador Sullivan on detained U.S. citizen Michael Calvey". U.S. Embassy & Consulates in Russia. 2021-02-17. Retrieved 2021-11-05.
  29. Toosi, Nahal. "Biden to Putin: Help me help you". POLITICO. Retrieved 2021-11-05.
  30. Max Seddon (June 3, 2019). "Kremlin says Michael Calvey may be released from house arrest". Financial Times. Retrieved June 8, 2019.
  31. "Supreme Court releases Michael Calvey and all defendants in his case from house arrest". TASS. 2020-11-12.
  32. Sergeev, Lev; Marrow, Alexander (2021-08-07). "Russia hands U.S. investor Calvey 5.5-year suspended sentence". Reuters. Retrieved 2021-11-05.
  33. "Michael Calvey of Baring Vostok Capital found guilty". washingtonpost.com. 2021-08-06.
  34. "Investor Calvey Appeals Russian Embezzlement Conviction". The Moscow Times. 2021-08-19.
  35. "Moscow court lifts US investor Michael Calvey`s restrictions on leaving home". bne IntelliNews. 2022-01-21.
  36. "Биография основателя инвестфонда Baring Vostok Майкла Калви" [Michael Calvey's Bio] (in Russian). TASS. February 15, 2019. Retrieved 12 February 2022.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.