The Moscow City Court's decision to keep Michael Calvey behind bars until April 13 comes despite numerous statements from prominent members of the Russian investment community who vouched for him in court.
Calvey, who co-founded private equity firm Baring Vostok in 1994, was detained along with five others in Moscow on suspicion they embezzled 2.5 billion rubles ($37 million) from Vostochny Bank, in which Baring Vostok has a controlling stake.
The veteran American investor denies the charges and maintains that they spring from a business dispute between the bank's shareholders. The case alleges that Calvey took a 2.5-billion-ruble ($37 million) loan from the bank and that in turn he transferred to the bank his shares in a company called IFTG that he said were worth the amount of the loan, but were actually worth far less.
Calvey on Thursday proposed the dispute be resolved by the bank selling the IFTG shares, saying he believed such a sale would fetch at least 2.5 billion rubles ($37 million). Calvey says the charges against him are likely connected to an arbitration case pending in London that Baring Vostok initiated against some Vostochny Bank shareholders.
"It's an attempt to deprive access to the London court of arbitration to key witnesses and key figures in this process because they're sitting here in pre-trial detention," Calvey attorney Dmitry Kletochkin told journalists at the court.
Prominent businessmen have expressed concern over the arrest of Calvey, a well-known figure in Russian investment circles. "If he can be taken down, then anybody can," said private investor August Meyer. "People don't want to invest their money when they can be thrown into jail over a civil dispute."