UPDATE 1-Russian central bank meeting Vostochny Bank minority investors

Russia's central bank is meeting Vostochny Bank minority shareholders following the detention on fraud charges last week of its majority U.S. investor, a banking source and a senior Russian official told Reuters on Wednesday. Russia's 35th biggest lender by assets, which is majority owned by private equity fund Baring Vostok Capital Partners, declined to comment, as did the central bank, citing a policy of not discussing the activities of banks that are going concerns.

Baring Vostok's founder, U.S. citizen Michael Calvey, and several other senior executives were detained on suspicion of defrauding Vostochny Bank shareholders. They deny the allegations, and say the case is being used to apply pressure in a business dispute. Prosecutors said the case was initiated when one of the minority shareholders at Vostochny Bank went to law enforcement officials alleging fraud by Baring Vostok.

The banking source said the central bank would meet the minority shareholders to discuss how to handle financial issues at the lender, especially in light of Calvey's detention. A coalition of lobby groups for European businesses active in Russia said in a joint statement on Wednesday it was extremely concerned about the detentions.

"The detention of Baring Vostok top-management has sent shockwaves through the country’s business community, and can potentially seriously damage the investment climate and attractiveness of Russia for foreign direct investments." Senior figures in the pro-business wing of Russia's ruling establishment have vouched for Calvey as an upstanding investor.

Former Finance Minister Alexei Kudrin, now head of the State Audit Chamber, called the detention an "emergency" for the Russian economy. (Additional reporting by Elena Fabrichnaya and Andrey Ostroukh; Writing by Christian Lowe; Editing by Alexander Smith)