Founder of the Baring Vostok private equity group Michael Calvey, who was detained on suspicion of fraud, sits inside a defendants' cage as he attends a court hearing in Moscow, Feb. 15, 2019.
Founder of the Baring Vostok private equity group Michael Calvey, who was detained on suspicion of fraud, sits inside a defendants' cage as he attends a court hearing in Moscow, Feb. 15, 2019.

Russian investigators have called for jailed U.S. investor Michael Calvey, whose detention stunned the business community in Moscow and clouded the investment climate, to be released from pretrial detention and placed under house arrest instead.

The Investigative Committee sent Moscow's Basmanny District Court the request ahead of an April 11 hearing on whether Calvey should be held longer pending further investigation and trial, court spokeswoman Yunona Tsareva said.

The request from the top investigative body suggests that President Vladimir Putin and his government want to limit the damage to Moscow's image, and the court is unlikely to deny it.

Calvey, a prominent foreign investor who founded the Moscow-based private-equity firm Baring Vostok in 1994, was detained along with five colleagues in February and charged with financial fraud.

They deny any wrongdoing, and their arrest and jailing has underscored the dangers of doing business in Russia and deepened Western concerns about the rule of law.

Kremlin critics have called for the release of Calvey, 51, who has been confined to the Lefortovo jail in Moscow since shortly after his arrest.

'Excessive Measure'

Baring Vostok welcomed the Investigative Committee's request for Calvey and a colleague, Aleksei Kordichev, to be transferred to house arrest and said it hopes for the same for the other four detainees.

"We firmly believe that prison detention is an excessive measure in the context of this case, which at its core is an exclusively commercial dispute and should be considered within a legal arbitration framework," it said in a statement.

Calvey's jailing has also rattled some Russian officials who fear that it has further harmed already severely strained ties with the West and hurt the chances of attracting investment at a time when the economy is struggling,

Longtime former Finance Minister Aleksei Kudrin, who is close to Putin, said in February that Calvey's jailing was an "emergency" for the Russian economy.

Kudrin said the decision to keep him behind bars showed that Putin's statements that people accused of economic crimes should not necessarily be jailed was "clearly" not being implemented.

Putin has frequently called for greater protections for entrepreneurs from baseless investigations and charges, and said in an annual state-of-the-nation address days after Calvey's arrest that "honest businesses" should not live in fear of prosecution.

Critics accuse the Kremlin of turning a blind eye to the politically or economically motivated abuse of law enforcement powers.

The charges against Calvey and his associates stem from allegations of embezzlement involving a Russian bank in which Baring Vostok has a controlling stake.

Calvey's arrests shocked the Moscow business community, in part because he had avoided political controversy and was seen as instrumental in helping develop Russian tech companies.

A French colleague of Calvey, Philippe Delpal, had his pretrial detention period prolonged until July 14 -- Bastille Day -- at a court hearing on April 9.

Baring Vostok called that court decision "illegal and unjustified" and said it plans to appeal.

"We are confident that the courts will establish the facts of this case and confirm that our colleagues are not guilty," it said in a statement.