Ordeal of U.S. investor in Moscow may end. It wouldn’t mean Russia has turned business-friendly.

It’s almost a year since Michael Calvey, the founder of Baring Vostok, the oldest and largest private equity fund operating in Russia, was arrested by Russian police after a dispute over the ownership of a bank. Calvey spent a few months in jail, and was then placed under house arrest in Moscow.

The US-born businessman may soon be freed, according to the usually well-informed independent Russian newsletter The Bell. If that is true, the end of a judicial case that many critics describe as another farce produced by the Russian criminal justice system would by no means amount to the advent of the rule of law in Russia. Nor would it mean that foreign investors should start considering the country as business-friendly.

Last week a Russian court transferred the three Baring Vostok managers who remained in jail to house arrest. The Bell says this may be the prelude to a quick verdict in a couple of months, which would sentence all of the accused including Calvey to time served. They would then be free to go. What will become of Baring Vostok and the $3.7 billion of committed capital it controls, according to its website, remains to be seen. A lot depends on what lessons Calvey will draw from his harrowing experience.

The dispute started with a shareholder row between Baring Vostok, which had acquired a majority stake in Russian lender Vostochny Bank, and Artyom Avetisyan, the bank’s minority shareholder. Avetisyan, “known for his close ties to Russia’s security services” as The Bell puts it, then counter-sued, alleging embezzlement. Russian courts since then have systematically sided with him, and Baring Vostok was predictably stripped of its ownership of the bank.

Unusually for such cases, Calvey’s arrest last year triggered open protests from well-connected Russian businessmen or politicians, such as the head of the Russian Direct Investment Fund, or the chief executive of Sberbank, Russia’s largest (and state-owned) bank. Russian President Vladimir Putin, however, who could have ordered the case dismissed in a country not reputed for its judiciary’s independence, refused to intervene. Russia’s political analysts have often noted that Putin is loath to become involved when it means going against the interests of his allies in the security services.

The Moscow stock exchange is up 25% in the year since Calvey was arrested, so it may be that investors don’t really mind. But there is a huge difference between buying Russian securities, a relatively safe bet, and direct investments in the country’s real economy, which remain fraught with all the dangers implied by doing business in an authoritarian regime.

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