UPDATE 2-Russian court frees director who poked fun at authorities on bail

A Russian court on Monday said it had freed on bail a prominent theatre and film director who had been under house arrest since 2017 on suspicion of embezzling state funds in a case critics said looked politically-motivated. The detention of Kirill Serebrennikov, an award-winning director, prompted an outcry among the country's liberal cultural elite who said the director was being persecuted for his work which lampooned what he saw as the pernicious role of the church and state in Russian society.

Investigators accuse Serebrennikov, 49, art director at Moscow's avant-garde Gogol Centre theatre, of leading a criminal group which embezzled 133 million roubles ($2.04 million) in state funds, a charge he denied. The court in Moscow ruled to release Serebrennikov and two other suspects in the case on the condition they do not leave the city. He and the other individuals still face trial.

"Now to celebrate," Serebrennikov was quoted by the Interfax news agency as saying after his release from house arrest where he has been held since Aug. 23, 2017. "I will be back soon. This is not very easy psychologically, but there is a lot to do. We have plays, rehearsals," he said.

"Thank you to all those people who ... said 'hang in there!' But again, I repeat, this isn't finished yet, we will continue to prove our innocence in court," Serebrennikov was quoted as saying. Serebrennikov was last month named best director at Russia's prestigious Nika Awards for his film, Leto, about late Soviet rock musician Viktor Tsoi.

President Vladimir Putin has said the case has nothing to do with censorship or political pressure and that the fact Serebrennikov had received state funds at all showed there had been no attempt to rein in his activity. Kremlin spokesman Dmitry Peskov on Monday declined to comment on Serebrennikov's release from house arrest.

($1 = 65.1925 roubles) (Additional reporting by Polina Nikolskaya; Editing by Andrew Osborn and Raissa Kasolowsky)