MOSCOW (Reuters) - Russian investigators have asked a court in Moscow to free detained U.S. investor Michael Calvey from custody at a hearing later this week and to place him under house arrest instead, the court said on Wednesday.

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The detention in February of Calvey, founder of the Baring Vostok private equity group, on embezzlement charges which he denies, has rattled some foreign investors and politicians in Russia, who said it had a chilling effect on the business climate.

Russian courts agree in most cases with prosecutors’ recommendations about whether suspects should be detained before trial, so there is a strong possibility Calvey will be allowed out of jail on Thursday.

The court said in a statement that investigators had submitted documents ahead of court hearings on Thursday in which they asked for Calvey and another detained suspect, Alexey Kordichev, to be put under house arrest.

That is a U-turn by investigators, who brought the charges against Calvey and his co-accused and had initially asked the court to hold them in detention pending trial. They are in a pre-trial detention facility in Moscow.

“We also look forward to similar (calls) being made regarding Michael and Alexey’s four colleagues,” Baring Vostok said in a statement welcoming the move by investigators.

Calvey, who was detained along with several other executives, has said the case is being used to apply pressure on him in a business dispute over a Russian bank in which he is a shareholder.

Moscow’s Basmanny district court on Tuesday extended by three months the detention of another suspect in the case, French national Philippe Delpal, at the request of prosecutors.

A hearing is scheduled for Thursday at the same court to decide on whether Calvey’s detention should be extended.

Several prominent Russian businessmen and officials have said that locking Calvey up in pre-trial detention was an unnecessarily tough measure and that his treatment by authorities was too harsh.

“The investment and business communities welcome the call by the Investigative Committee...to ease the restrictive measures against... Michael Calvey,” Kirill Dmitriev, head of Russia’s sovereign wealth fund, said.

Boris Titov, presidential commissioner for entrepreneurs’ rights, said last month that he and other business associations were working to try to get Calvey freed on bail.

The Kremlin has said President Vladimir Putin does not plan to intervene in the case and that investigators should be allowed to do their job.