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Uralkali CEO Moved From KGB Prison to Belarus House Arrest

Belarus moved OAO Uralkali (URKA) Chief Executive Officer Vladislav Baumgertner from a KGB prison to a rented apartment in Minsk in a sign that a dispute that roiled the $20 billion market for potash may be nearing resolution.

The move by Belarus authorities was “unexpected,” Baumgertner’s lawyer Alexei Basistov said today by phone. No decision has been made on seeking more lenient terms of detention for the 41-year-old, he said.

Baumgertner was arrested a month ago at a Minsk airport following talks he attended at the invitation of Belarus Prime Minister Mikhail Myasnikovich over his Russian company’s withdrawal from the Belarusian Potash Co. trading venture. Belarus has called for the arrest of Uralkali’s billionaire shareholder Suleiman Kerimov, who has since held talks on selling his stake, people familiar with the matter have said.

Belaruskali, Uralkali’s partner in the BPC venture that controlled 40 percent of global potash exports, has said a reconciliation won’t be possible unless the Russian company, the world’s largest producer of the soil nutrient, changes its strategy or owner.

Russian entrepreneur Vladimir Kogan, a longtime ally of President Vladimir Putin, is the leading candidate to buy the billionaires’ Uralkali stake, people said on Sept. 13. Kerimov has made new demands in talks with Kogan this week, which may cause attempts to reach a deal to collapse, RIA Novosti reported, citing an unidentified person familiar with the situation.

Photographer: Andrey Rudakov/Bloomberg

Vladislav Baumgertner, chief executive officer of OAO Uralkali. Close

Vladislav Baumgertner, chief executive officer of OAO Uralkali.

Close
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Photographer: Andrey Rudakov/Bloomberg

Vladislav Baumgertner, chief executive officer of OAO Uralkali.

Prokhorov, Gutseriev

Anton Averin, a spokesman for Kerimov’s Nafta Moskva Investment Co., declined to comment.

Billionaire Mikhail Prokhorov’s Onexim Group is among potential bidders for Kerimov and his partners’ stakes in Uralkali, people with direct knowledge of the matter said this week. Other potential approaches may come from billionaires Mikhail Gutseriev and Vladimir Evtushenkov, Forbes Russia reported this month, citing people it didn’t identify.

The Uralkali CEO’s transfer to house arrest became possible after an investigation of the abuse of office charge against him was completed, RIA reported earlier, citing Valentin Shayev, the head of Belarus’s Investigative Committee.

Authorities also considered a plea from Baumgertner’s relatives, the news service cited Shayev as saying. The executive was charged in his capacity as chairman of Uralkali’s former marketing venture with Belarus.

Mother’s Plea

The Uralkali CEO’s mother won his release from prison with an appeal to Belarusian President Aleksandr Lukashenko, RIA reported, citing Anna Slavina, a defense attorney, who was quoted in a statement from the Republican Bar Association in Minsk.

About 6,000 Uralkali employees signed a letter sent to Lukashenko, asking the Belarus president to “take measures for quickest release” of Baumgertner, the company said today.

On July 30, Berezniki-based Uralkali withdrew from the BPC venture and said it would ramp up production, sending shares of rival suppliers including Potash Corp. of Saskatchewan Inc. and Tel Aviv-based Israel Chemicals Ltd. (ICL) tumbling.

A decline in potash prices threatens President Lukashenko, who has ruled Belarus since 1994, with a drop in foreign currency needed to meet imports and international debt obligations. A final payment from a Russian-led $3 billion bailout loan is planned for this year. The cash is tied to policy measures, including some state asset sales that haven’t been carried out.

Good Health

Putin and Lukashenko attended military drills together today in Grodno, Belarus, and in Russia’s Kaliningrad region, Kremlin spokesman Dmitry Peskov said. He didn’t know whether the men discussed Uralkali and declined to comment on Baumgertner’s house arrest.

Baumgertner is being kept under “surveillance by KGB operatives” at the apartment, Basistov, his lawyer, said by e-mail.

The executive is allowed visits by close relatives, his Minsk-based lawyers told reporters in the Belarusian capital today. He is in good health, has everything he needs and is approaching his situation positively, said Darya Lipkina, one of the attorneys. His legal team have no information on whether the investigation against Baumgertner has ended, said Dmitry Goryachko, another attorney.

To contact the reporters on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net; Aliaksandr Kudrytski in Minsk, Belarus at akudrytski@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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