US investor Michael Calvey, head of equity firm Baring Vostok, has been under house arrest since April 2019

Moscow (AFP) - A Moscow court on Wednesday permitted a transfer to house arrest for three Russian executives caught up in the controversial case of Baring Vostok equity firm after they spent a year in pre-trial detention in prison.

The Moscow City Court made the ruling after denying a request by investigators to extend the pre-trial detention of Ivan Zyuzin, Maxim Vladimirov and Vagan Abgaryan, a spokesman for Baring Vostok told AFP.

The case of Baring Vostok, one of Russia’s oldest private equity groups, has sent shock waves through the country’s business community, with many seeing it as an example of the use of criminal prosecution in a commercial dispute.

Along with French and US nationals, the Russians are accused of defrauding a Russian lender, Vostochny Bank, of 2.5 billion rubles ($38.7 million).

The three Russian men have been in prison since February last year.

Their assets have been frozen and their contact with families highly restricted.

“I am so happy that Ivan can finally be home, this is a huge relief for us,” Zyuzin’s wife Nina Budazhapova told AFP.

“Unfortunately, this absurd criminal case still exists but defending oneself from home will be much easier,” she added.

Budazhapova said the last time their four children had seen their father, now 36, was on February 14, 2019, the day he was detained.

The foreign defendants in the case – the fund’s American founder Michael Calvey and his French colleague Philippe Delpal – were moved from pre-trial detention to house arrest last year.

While Calvey and Delpal’s ordeal has drawn international attention including that of French President Emmanuel Macron, the fate of Baring Vostok’s Russian executives has mostly remained out of the spotlight.

Baring Vostok, one of Russia’s oldest private equity groups, has condemned the authorities’ treatment of the Russians as outrageous.

In a statement on Wednesday, Baring Vostok said the Moscow City Court had “finally” heard the defence team’s arguments but it pointed out that the men were still “hostages to a commercial conflict.”

“We intend to fight further to show our colleague’s complete innocence and the absurdity of the charges,” it said.

- ‘Extremely worried’ -

Earlier this week the Moscow City Court ruled that Calvey and Delpal must remain under house arrest until mid-May.

Delpal’s wife said she welcomed Wednesday’s court ruling but remains fearful over the case’s outcome.

“Philippe risks ten years in prison for nothing,” Cecile Delpal told AFP. “I am flabbergasted and extremely worried about the future.”

The men all deny the charges, saying the case is part of a struggle for control of Vostochny Bank involving a little-known Russian businessman with links to the Kremlin and law enforcement agents.

Baring Vostok has invested in some of the country’s biggest companies including search giant Yandex and Ozon, a top online retailer.

Its founder Calvey, who is highly respected in Russian investment circles, has worked in Russia for more than 20 years and has steered clear of politics.

A host of prominent figures have criticised the charges against the investment fund.

Former finance minister Alexei Kudrin said a few months after the men’s arrest that the Baring Vostok case had caused capital flight from Russia to double.