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Illustration: Lazaro Gamio/Axios

Russia's legal system made global headlines yesterday, after a Moscow court sentenced opposition leader Alexei Navalny to a multi-year prison term for parole violations.

In a different Moscow court this week, U.S.-born investor Mike Calvey began fighting for his own freedom against very long odds.

Backstory: Calvey in 1994 founded Baring Vostok Capital Partners, a Russia-based venture capital and private equity firm that's invested billions of dollars into local companies, including Yandex and Ozon.

  • In early 2019, Calvey and several colleagues were arrested on criminal embezzlement charges, stemming from BCVP's 2010 acquisition of a troubled Russian consumer bank.
  • The bank faltered and later merged with another struggling lender that was led by an investor with Russian government ties. Calvey accused the investor of asset-stripping, and the investor countered by accusing Calvey of artificially inflating his bank's value.
  • That investor's accusation ultimately led to Calvey's arrest, even though it read like a commercial shareholder dispute — a civil matter rather than a criminal one.

Fast forward: Calvey and the other investor eventually settled their issues out of court, with Baring Vostok paying around $33 million but not admitting any guilt.

  • That settlement did not solve Calvey's problem with Russian authorities.

What he's saying: Calvey, in his opening statement to the court, pleaded not guilty and argued that investigators intentionally ignored exculpatory evidence. He also called the charges both "unfair" and "illegal."

  • But it's not clear that Calvey's words will matter, as Russian prosecutors have a longstanding conviction rate above 99%
  • Some of Calvey's supporters argue that the civil settlement could make him the exception to the rule, but that may just be wishful thinking.

The bottom line: Calvey's fate may double as the fate of Western investment in Russia, particularly for deals that may require in-person diligence or negotiation. If he goes away, so does such activity.

Go deeper

Feb 2, 2021 - World

Alexei Navalny sentenced to prison

Navalny is escorted to prison by police. Photo: Alexander Nemenov/AFP via Getty

Russian opposition figure Alexei Navalny has been sentenced to about 2.5 years in prison, officially for violating parole while he recovered in Germany from an assassination attempt.

Driving the news: A 3.5-year suspended sentence dating from 2014 — stemming from charges that were widely seen as politically motivated — was turned into a prison term, minus the 10 months Navalny previously spent under house arrest. His arrest last month upon his return to Russia sparked widespread protests over the past two weekends.

DiDi to delist from NYSE under Chinese govt pressure

Illustration: Sarah Grillo/Axios

Chinese ride-hail giant DiDi said it will delist from the New York Stock Exchange, following a Chinese government crackdown on foreign listings.

Why it matters: This reflects how geopolitical tensions are bleeding into the capital markets.

Updated 22 mins ago - Health

Omicron cases confirmed in 5 U.S. states

A healthcare worker inserts a Covid-19 rapid test into a machine in Denver, Colorado. Photo: Daniel Brenner/Bloomberg via Getty Images

Hawaii became on Thursday the fifth state to confirm the newly discovered Omicron variant after New York announced five new cases earlier in the day.

The latest: In Hawaii, the variant was found in an unvaccinated O'ahu resident with moderate symptoms who had previously been infected with COVID-19, per a state health department statement. The variant has also been confirmed in California, Colorado and Minnesota.