Prominent Russian director Kirill Serebrennikov has received a three-year suspended sentence after being found guilty of embezzlement.
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He and two others were convicted of misappropriating £1.5m ($1.86m) of state funds for a theatre project.
Serebrennikov has called the charges laughable. His supporters say the case aims to stifle artistic expression.
But the Russian government said the verdict would serve as a warning against corruption in the arts.
The film and stage director, a well-known critic of arts censorship in Russia, was greeted by a crowd of well-wishers as he arrived for his court hearing on Friday. He and many others wore face masks to protect against the coronavirus.
Inside the Moscow courthouse, the judge said the director and co-defendants Yury Itin and Konstantin Malobrodsky had "carried out actions directed at personal enrichment" and misled staff at the culture ministry.
Serebrennikov was placed on probation for three years, fined, and banned from overseeing a cultural organisation.
"Kirill is devastated by the conviction but very happy to be going home," said his lawyer Dmitry Kharitonov.
Itin and Malobrodsky were also given suspended sentences and ordered to pay fines.
What was the director accused of?
The case relates to a modern-art project named Platforma, which ran between 2011 and 2014.
Prosecutors said Serebrennikov had formed a criminal group with his co-defendants to sign contracts for non-existent services and pocketed the money.
He has long insisted the money was properly spent for the intended purpose. The case nearly collapsed at one point, when a judge sent it back to prosecutors because of "inconsistencies".
The trial resumed with a new judge, who backed the claims. The prosecution had asked for a six-year prison sentence, but Serebrennikov received a three-year suspended term.
Kremlin spokesman Dmitry Peskov said the case justified "a thorough analysis of how state funds are spent in cultural institutions so that there is less scope for corruption in this area".
Who is Serebrennikov?
The 50-year-old heads one of Moscow’s most prominent theatre venues, the Gogol Centre.
A stringent critic of arts censorship in Russia, he has warned that "everything is returning to the most pathetic Soviet practices".
Serebrennikov’s ballet production about the dancer Rudolf Nureyev, who defected during the Cold War, was cancelled in 2017.
Described as one of the most anticipated ballets of the season, it was pulled while Serebrennikov was placed under house arrest for the alleged embezzlement.
His detention was seen by many as politically motivated and led to an outcry in the arts world — in Russia and beyond.
A petition gathered more than 50,000 signatures urging Russian officials "to drop the flimsy accusation". Foreign signatories included actresses Cate Blanchett and Nina Hoss, and the film director Lars von Trier.