SAINT PETERSBURG: The arrest of US investor Michael Calvey, head of one of Russia's biggest private equity firms, has roiled the sector, with capital flight doubling as investors put funds elsewhere, economist Alexei Kudrin said Thursday.

Kudrin, a former finance minister who now heads the Russian Audit Chamber, has already criticised fraud charges against Calvey, the head of Baring Vostok fund, and five others.

Their arrests were "a shock for the economy. Since the beginning of this year, capital flight has doubled and is now more than $40 billion," Kudrin told the Saint Petersburg Economic Forum, a showpiece investment event hosted by President Vladimir Putin this week.

Calvey, his French colleague Philippe Delpal and four Russian citizens were arrested in February and have been accused of defrauding a Russian bank of 2.5 billion rubles ($38.7 million).

Calvey and a Russian who is reportedly helping the investigation were later moved from jail to house arrest while four remain behind bars.

Baring Vostok maintains that no crime was committed and says a rival is using the Russian justice system to settle a business dispute.

Calvey's case has been compared with previous ones that also affected foreign investors' attitudes toward Russia. Kudrin estimated that "70 percent consider doing business (in Russia) unsafe."

The case has overshadowed the economic forum this year, with the US ambassador boycotting the event, and government officials appeared frustrated at the focus on Calvey.

"Yes, Calvey is a foreign investor... but I think we are allocating too much attention to this," Finance Minister Anton Siluanov said Thursday.

"There are similar incidents in the West, but they don't pay so much attention to them."

This week, the Kremlin said it would prefer that Calvey be able to participate in the forum, where leading Russia investors meet directly with Putin.

Calvey's defence team has filed a request for him to attend, but have not received a response. —AFP