September 2, 2019 / 8:19 AM / 17 days ago

Russian court orders seizure of stake in bank in dispute with Baring Vostok

FILE PHOTO: U.S. investor and founder of the Baring Vostok private equity group Michael Calvey, who is under house arrest on suspicion of fraud, attends a court hearing in Moscow, Russia August 15, 2019. REUTERS/Evgenia Novozhenina/File Photo

MOSCOW (Reuters) - A court in Russia’s Far East ordered the seizure of a stake in Vostochny Bank [VOSEK.UL] held by private equity group Baring Vostok at Vostochny Bank’s own request, court documents published on Monday showed.

Baring Vostok has been in the spotlight since the arrest earlier this year of several of its executives including U.S. investor Michael Calvey on embezzlement charges. They deny wrongdoing and say the case is being used against them in a corporate dispute over control of Vostochny Bank.

Vostochny Bank had requested the seizure of more than 334 billion shares held by a firm controlled by Baring Vostok, documents from the arbitration court of Russia’s far eastern Amur region said.

Baring, which ceded a 9.99% stake in Vostochny Bank and lost its status as majority shareholder in June, holds a 41.6% stake in Vostochny.

Vostochny Bank said it the seizure of the stake had been necessary to prevent Baring Vostok selling shares in Vostochny before a court decision.

Baring Vostok said it would appeal the decision.

The case against Calvey and other Baring Vostok executives has rattled the Russian investment community and soured the business climate in the country.

Reporting by Andrey Ostroukh, Maria Kiselyova; Writing by Tom Balmforth and Gabrielle Tétrault-Farber; Editing by Toby Chopra

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