A year after russian secret services shocked moscows business community by arresting michael calvey, the us private equity executive was diagnosed with a liposarcoma the size of a tennis ball in his leg.

Though the court allowed mr calvey to undergo cancer treatment at an expensive private clinic in which his company baring vostok has a stake, investigators refused to let him remove his electronic monitoring bracelet to undergo an mri scan.

As a result, doctors removed the tumour using a more antiquated method that required mr calvey to undergo an extra round of radiation therapy, according to two people close to him.

Though mr calveys cancer is now in remission, the episode indicates his predicament as senior russian business figures lobby officials to drop the embezzlement charges against him and five colleagues from baring vostok, russias largest foreign-funded investor.

Hopes among his supporters the charges would soon be weakened have been dashed in recent weeks after back-channel efforts foundered amid resistance from kremlin hardliners and the security services, according to people close to the talks.

Since mr calveys arrest in february last year, the case has cast a pall over russias business community, already struggling withweak growth and western sanctions.

Baring vostok claims former partner artem avetisyan is abusing criminal proceedings to win a business dispute a common practice in russia and has submitted evidence it claims exonerates mr calvey of wrongdoing.

Vladimir putin, russias president, backed the case publicly and made a show of support for mr avetisyan, who is a protg of first deputy prime minister andrei belousov.

But efforts to strike a deal stalled after pushback from law enforcement and mr belousov, according to two people who have lobbied on mr calveys behalf and a third person involved in the negotiations.

[exonerating mr calvey] would mean explaining to putin the case was a mistake and nobody wants to do that, one of the people said.

More recently, however, mr belousov has cooled on mr avetisyan and it is believed that he would be open to releasing mr calvey after a watered-down conviction, according to a state banker close to security services.

The kremlin declined to comment. a spokesperson for mr belousov said he had no information about the proceedings and no position on the matter in question.

Russian prosecutors accuse mr calvey and the other defendants of defrauding vostochny, a top-30 lender that baring vostok controlled until last year, of rbs2.5bn ($39m).

They deny the charges, which baring vostok claims are part of a struggle for the bank that led a court to award control to mr avetisyan.

Mr avetisyan denies any involvement in the criminal proceedings and claims they are unrelated to the dispute over control of the bank.

The little-known investor is deputy head of the agency for strategic initiatives, a kremlin think-tank that is chaired by mr putin but in which mr belousov is the driving force.

Baring vostok has held talks over settling the multi-jurisdictional dispute with mr avetisyan over vostochny whose profits fell more than 600 per cent year on year in the first half of 2020 but has yet to convince the bank to absolve it of wrongdoing in the criminal matter, two of the people said.

Even if the bank agreed, however, there was no guarantee russian security services would drop the charges, the people added. theyre axiomatically programmed to defend the state and assume everything else is against their interests, one of them said.

Mr calvey, who had enjoyed a stellar 25-year record investing in russia, has spent the past year-and-a-half under house arrest after the initial outcry over the case, including pressure from the us ambassador, led to his release following two months in a vip jail.

French executive philippe delpal was released several months later after president emmanuel macron appealed to mr putin, while the four russian defendants were transferred to house arrest earlier this year.

As he awaits a final indictment later this month, mr calvey has been barred from communicating with the outside world apart from his family, who live in london, lawyers and doctors who treated him for cancer.

Mr calvey remains stoic about his treatment, according to one of the people. i mean, its not like they sent him to the 1970s and used a sledgehammer, the person said. its absurd, im not saying its human [...] but they could have done significantly worse.

In an interview with the financial times last year, mr avetisyan described mr belousov as a close friend, recalling trekking trips they took to mountaintops and the south pole.

We overcame serious challenges in difficult conditions, mr avetisyan said. thats when you discover a lot of things and people get to know each other better human nature is immediately exposed and you understand a mans worth.

Mr avetisyan claimed that mr belousov learned about the whole case from the media and denied asking him to intervene in the vostochny conflict.

Of course, belousov asked what was going on, as did many others, mr avetisyan said. but while he admitted mr belousov was a close friend, he said: i never discussed banking with belousov, he never asked, and i never asked him for anything.

Mr belousov said last year that he had asked central bank governor elvira nabiullina to intervene on mr avetisyans behalf in regulatory matters, but said theyd carry me out feet first if i went to the president for help in a business dispute.