(Bloomberg) -- The Moscow City Court released French investor Philippe Delpal from jail to house arrest after prosecutors unexpectedly dropped their opposition in a closely watched case that’s become a thorn in relations between Russia and France.

Delpal has been in jail in Moscow since he was arrested in February along with several of his partners in Baring Vostok Capital Partners on charges of fraud involving a bank the fund invested in. Delpal and his colleagues deny any wrongdoing and say the charges are the result of a business dispute with their local partner in the bank. The arrests at Baring Vostok, one of Russia’s largest foreign private-equity funds, have shaken the investment community.

The decision comes just days before Putin is scheduled to travel to France to meet his French counterpart, Emmanuel Macron, who has raised the Delpal case with the Russian leader in past conversations.

“I don’t know why I’ve been in jail for six months since there was neither fraud nor any deception,” Delpal said from the defendant’s box before the ruling Thursday. The court later ruled that he be held under house arrest until Oct. 13.

The head of the fund, Michael Calvey, was released to house arrest in the spring after a series of appeals on his behalf to President Vladimir Putin by prominent local business executives and officials. In June, Putin said Delpal had been denied house arrest because, unlike Calvey, he didn’t own property in Moscow. Delpal then bought an apartment, but a court last month again rejected his appeal for house arrest.

The prosecutors gave no explanation for their change in position Thursday, other than to note that Delpal owns an apartment and thus is eligible for house arrest since the crime he’s accused of is an economic one.

To contact the reporter on this story: Irina Reznik in Moscow at ireznik@bloomberg.net

To contact the editors responsible for this story: Gregory L. White at gwhite64@bloomberg.net, Natasha Doff

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