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A Moscow court ruled Monday to keep arguably Russia's most revered contemporary theater and film director under house arrest, in a criminal case that has fueled fears of a revival of Soviet era-like crackdown on the arts.

The Moscow City Court turned down Kirill Serebrennikov's appeal against a ruling last week to put him under house arrest, but agreed to allow him a two-hour walk outside the house each day.

Serebrennikov was arrested last month on charges of embezzlement in St. Petersburg, where he was shooting a movie, and taken to Moscow under armed escort.

For many in Russia, particularly in the arts scene, a photograph of the stunned-looking director, handcuffed and escorted to the court by three burly masked men, came as the ultimate proof that Soviet-style censorship has returned.

Investigators are accusing the 47-year old director of scheming to embezzle about $1.1 million in government funds allocated for one of his productions and the projects he championed between 2011 and 2014. Serebrennikov dismissed the accusations as "absurd and impossible."

The director was briefly detained and questioned in May but investigators stopped short of saying they suspected he was involved. An accountant and one senior manager who worked with Serebrennikov are in custody and another manager is under house arrest.

Marina Davydova, a theater critic and a friend of Serebrennikov's who saw him shortly before the arrest, said he had somewhat anticipated his arrest but did not consider fleeing Russia because of his work commitments. In the few months between the questioning in May and his arrest in August, one of Russia's most sought-after directors staged one opera in Moscow, nearly finished another and began filming a movie in St. Petersburg.

"Kirill is a creative powerhouse," Davydova told The Associated Press. "They took his passport during the search. He cannot run away from work, he is constrained by it much more than (the absence of a) passport. He is an idealist, he kept saying till the end: So, everything I built here - it's all for nothing?"

Serebrennikov's cutting-edge productions, which range from drama to opera and movies, have been running against a more conservative streak in Russia society. He's focused on the little discussed subjects such as official lies, corruption and sex. Though bringing him critical acclaim, his work has been condemned by the more hard-line elements within Russian society, who protested against the use of state funds to finance his endeavors.

In what was largely perceived as the first warning shot from his high-placed enemies, the Bolshoi Theater in July canceled a much-anticipated ballet about dancer Rudolf Nureyev just three days before the opening night. Despite the numerous reports suggesting otherwise, the Bolshoi denied that the Nureyev ballet, directed by Serebrennikov, had been scrapped because of its frank description of his gay relationships, a taboo under a strict Russian law banning gay propaganda.

Conservative activists have felt empowered since Vladimir Putin returned as Russia's president in 2012. Art shows have been ransacked while theater shows have been cancelled under pressure from church officials. Tensions peaked earlier this year when conservative activists led by a lawmaker lashed out at a yet-to-be-released movie about the last czar's affair with a ballerina. The film's director has received threats, and unidentified attackers threw Molotov's cocktails at his studios last week.

Davydova, the theater critic, is convinced that Serebrennikov's arrest is a personal vendetta by those who feel empowered enough to go after the likes of Serebrennikov, someone they consider to be an unpatriotic deviant.

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