Outspoken theatre and film director Kirill Serebrennikov has been detained by Russia’s investigative committee on suspicion of fraud.
He is being investigated over the alleged embezzlement of 68m roubles (£880,000; $1.1m) of state funding awarded for a theatre project.
Serebrennikov is a vocal critic of censorship in the arts in Russia.
His ballet on the life and work of Rudolf Nureyev was pulled this year amid controversial circumstances.
The Bolshoi theatre argued the production was not ready for public performance but it was widely believed that the ballet was considered too risqué for contemporary, conservative Russia, reports the BBC’s Sarah Rainsford in Moscow.
There may also have been concerns about staging a production linked to a figure known to be under investigation and facing criminal charges.
The director was expected to be charged by the investigative committee (SK) on Tuesday before appearing in court.
Kirill Serebrennikov is director of the state-funded Gogol Centre and he was taken in for questioning after his flat was raided in May. The Gogol Centre was also searched, and two other theatre directors and an accountant were arrested.
The case has shaken Russia’s arts world, where people fear it is a move meant to silence Serebrennikov. This has been denied by President Vladimir Putin.
At the centre of the case is funding awarded from 2011 to 2014 for a theatre project known as Platform, which aimed to make contemporary dance, music and theatre popular.
A former accountant who worked with Serebrennikov, Nina Masliayeva, has given evidence against him as part of a pre-trial deal with prosecutors. Two other theatre directors, Alexei Malobrodsky and Yuri Itin of Seventh Studio, have denied involvement.
If found guilty of embezzlement, Serebrennikov could face up to a decade in jail, Russian media report.
He has described the situation he faces as “absurd and schizophrenic”. In a Facebook post in June, he appealed to supporters to prove that the funding had been spent on productions.
“It is particularly important to remember the production of A Midsummer Night’s Dream, which we performed at Platform more than 15 times… It was nominated for all sorts of theatrical awards… Now the SK investigators tell us that it does not exist and it never did.”