A Russian court on Friday handed US investor Michael Calvey and French banker Philippe Delpal suspended sentences after convicting them of embezzlement in a high-profile case that has rattled the country's business community.

Even if they will not spend any more time in jail, Calvey and Delpal decried as "outrageous" and "shocking" a ruling that brings down the curtain on a business dispute that further damaged the investment climate in Russia and triggered an outflow of foreign capital.

Calvey, the founder of investment fund Baring Vostok who spent nearly two years in detention and under house arrest, received a suspended sentence of five years six months for a crime he said he did not commit.

Delpal, who spent six months in jail before he was put under house arrest, received a four-and-a-half year suspended sentence, according to an AFP reporter in Moscow's Meshchansky district court.

He also insisted he was not guilty of any crime.

Five Russian associates who said they were innocent also received suspended sentences of between three-and-a-half years and five years.

"The court has come to the conclusion that the defendants can be reformed without being isolated from society," said judge Anna Sokova, who took more than 15 hours Thursday and Friday to read out the judgement.

All seven were also given a five-year probation period.

On Thursday, the court found Calvey, Delpal and their Russian associates guilty of "embezzlement of funds on an especially large scale."

Calvey was arrested along with Delpal in February 2019 and accused of defrauding Vostochny Bank of 2.5 billion rubles ($32.9 million). He spent two months in jail before being put under house arrest. He was released from house arrest last November.

Both Calvey and Delpal decried the court ruling.

"I view the verdict as unfortunate and deeply unfair," Calvey, 53, told reporters, adding that the conviction on the charge of embezzlement was "deeply offensive."

US investor Michael Calvey said it is 'simply outrageous to be convicted of a crime that never happened.'
US investor Michael Calvey said it is 'simply outrageous to be convicted of a crime that never happened.' AFP / Dimitar DILKOFF

"Compared to most cases, receiving a suspended sentence is already almost a victory. But on the other hand, it is simply outrageous to be convicted of a crime that never happened," he said in English.

He said he planned to meet with his lawyers and decide on his next steps over the following week.

Delpal, 48, said he would appeal.

"If this is justice, then I don't understand it. I am in shock," he told reporters, noting it was a "sad" ruling for all businesses in the country.

He said the judge rejected the arguments of the defence and sided with the prosecution.

"The court did not want to understand or could not understand that in this case there is no victim or damage and that there is no beneficiary of a potential embezzlement," Delpal added.

The case against Calvey, who has worked in Russia for more than two decades, has shocked the business community and triggered an outflow of foreign capital from the country.

Baring Vostok used to be a major shareholder in Vostochny Bank, and defendants in the case insisted it was fabricated in an attempt by minority shareholders to gain full control of the bank.

In a statement on Friday, Baring Vostok said: "Our colleagues are innocent."

"Vostochny Bank was the only beneficiary of all transactions, as evidenced by the financial documents attached to the case file and the testimony of all witnesses," the statement said.

Influential voices in the Russian business community publicly supported Calvey and Delpal, saying that the case was a commercial dispute and should not be decided by a criminal court.

Emmanuel Quidet, president of the France-Russia Chamber of Commerce and Industry, said on Friday that he found the ruling "extremely shocking" and it could affect Russia's image.

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

While arrests and criminal prosecution of business people in Russia are common and often launched by local authorities or competitors, it is rare for foreign investors to be targeted.