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UPDATE 2-Russian court frees U.S. investor Calvey and colleagues from house arrest

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MOSCOW, Nov 12 (Reuters) - Russia’s supreme court has ruled that U.S. investor Michael Calvey and other executives of private equity firm Baring Vostok may be released from house arrest, the fund said on Thursday.

Calvey, a prominent investor and founder of private equity group Baring Vostok, was detained along with other fund executives in early 2019 after state investigators accused them of a 2.5-billion-rouble ($32.52 million) embezzlement related to mid-sized lender Vostochny.

The court ruling comes after rival shareholders in Vostochny Bank agreed in late October to settle a corporate dispute that Calvey said was the root cause of his arrest.

“My plan for the near future is to return to work,” TASS news agency quoted Calvey as saying on Thursday.

Wisconsin-born Calvey, who has denied the accusations, was supposed to be under house arrest until Nov. 13.

Calvey and his colleagues are not allowed to change their place of residence, leave home at night or visit Vostochny bank offices, among other restrictions that are still in place for them, TASS said, citing the court’s ruling.

Vostochny has been at the centre of the Calvey dispute after Baring Vostok and businessman Artyom Avetisyan became locked in a battle for control of the bank, something Calvey has alleged was behind the case against him and others.

“The criminal case that has been ongoing for the last year and nine months must be halted, because in actual fact no crime was committed, nor was there any party that suffered damages,” Baring Vostok said in a statement.

Calvey’s case has rattled Russia’s business community and prompted several prominent officials and businessmen to voice concerns about the way the state deals with commercial disputes and executives caught up in them.

Kirill Dmitriev, head of Russia’s Direct Investment Fund (RDIF), said the release of Calvey and his colleagues was “an important signal to all investment community.”

“All international partners of the RDIF take this news positively, which will reflect on their readiness for new investment in the Russian economy,” Dmitriev said.

$1 = 76.8830 roubles Reporting by Andrey Ostroukh Editing by David Goodman and Bernadette Baum

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