Putin Critic Navalny Stays Free as Court Suspends Sentence

Photographer: Andrey Rudakov/Bloomberg

Alexey Navalny, who in the past two years helped organize the biggest demonstrations against Putin’s 13-year rule, won’t serve the prison term though the appeal judge in the city of Kirov upheld his conviction for embezzlement at a hearing today. Close

Alexey Navalny, who in the past two years helped organize the biggest demonstrations... Read More

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Photographer: Andrey Rudakov/Bloomberg

Alexey Navalny, who in the past two years helped organize the biggest demonstrations against Putin’s 13-year rule, won’t serve the prison term though the appeal judge in the city of Kirov upheld his conviction for embezzlement at a hearing today.

A Russian court suspended a five-year prison sentence for Alexey Navalny, potentially barring the leading opponent of President Vladimir Putin from political office while leaving him a free man.

Navalny, 37, who in the past two years helped organize the biggest demonstrations against Putin’s 13-year rule, won’t serve the prison term though the appeal judge in the city of Kirov upheld his conviction for embezzlement at a hearing today.

Navalny, who was a runner-up in last month’s elections for Moscow mayor, was found guilty in July of defrauding a state timber company in Kirov, 900 kilometers (560 miles) northeast of Moscow. His conviction, which can still be appealed in a higher court, would exclude him from ever holding public office.

“Neither I, nor my colleagues will stop our political battle, we’ll continue it,” Navalny said after the verdict was read out in the regional court.

Thousands of people in Moscow protested his July 18 conviction, which also sparked condemnation by the U.S. and Europe, on the eve of a meeting of Group of 20 finance chiefs in the Russian capital.

The Micex Index gained as much as 0.3 percent after the ruling and was trading 0.1 percent higher at 1,532.48 at 7:06 p.m. in Moscow. The benchmark gauge fell as much as 1.6 percent after the conviction.

Surprise Request

Prosecutors in July unexpectedly asked the court to free Navalny pending appeal, a day after he said he’d withdraw from a snap Moscow mayoral election if he remained in prison. The opposition leader came second in the vote, scoring 27.2 percent to incumbent Sergei Sobyanin’s 51.4 percent.

Navalny, who arrived today at the court carrying personal possessions needed for prison, said he was confident of overturning the conviction, according to RIA Novosti. The prosecutors asked to uphold the five-year sentence.

A lawyer and anti-corruption activist, Navalny has vowed to contest the next presidential election in 2018 and put Putin and his billionaire allies in jail if he wins.

“Navalny’s suspended sentence keeps him on a tight leash,” Dimitri Kryukov, founder of Verno Capital, which manages about $230 million in Russian assets, said in an interview. “What he has been doing exposing corruption has been a good thing and investors like it but overall we don’t see him becoming a big factor anytime soon in decision making.”

Putin Crackdown

Putin, 61, has hardened his response against opposition since winning a new six-year presidential term last year. Some protesters have been imprisoned, while economist Sergei Guriev and former chess grandmaster Garry Kasparov, critics fearing prosecution, fled Russia this year.

Navalny may have his suspended sentence quashed under an amnesty proposed by Putin’s human rights council for those convicted of non-violent crimes, according to the body’s head, Mikhail Fedotov. The opposition leader still faces several other fraud-related criminal investigations.

“Today’s decision shows the narrow room for maneuver for the opposition,” billionaire Mikhail Prokhorov, an opposition presidential candidate last year, said in an e-mailed statement. “A suspended sentence is an admission that there wasn’t any crime committed but it keeps a politician who is now famous across Russia in a state of limbo, with the option of imprisoning him at any time.”

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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