Russia Opens Case Against Uralkali CEO as Condition for Return
Stock Chart for Uralkali OJSC (URKA)
Baumgertner is being investigated for “abuse of office,” the charge brought against him in Minsk, according to a statement today on the Russian Investigative Committee’s website. Belarusian President Aleksandr Lukashenko said Oct. 11 that Russia must lay criminal charges against the executive before he’d be allowed to return home.
Uralkali, the world’s biggest producer, roiled the $20 billion potash market at the end of July after withdrawing from a trading venture with its Belarusian partner, accusing it of selling cargoes outside of their marketing agreement. The Russian company said it would increase output, sending shares of fertilizer producers plunging from Toronto to Tel Aviv.
“All is going as planned: Russia needs to open the case to get the CEO home and release him there after confirming that he’s not guilty,” Elena Sakhnova, an analyst at VTB Capital in Moscow, said by phone.
The 41-year-old Baumgertner was arrested in Minsk on Aug. 26, a month after announcing the end of the potash marketing venture. Charges were filed against him as chairman of Belarusian Potash Co., as the trader was known. After spending a month in a KGB prison, he was put under home arrest in a rented Minsk flat. The charge against Baumgertner has been changed, “probably” to embezzlement, Lukashenko said last week.
Alexei Basistov, Baumgertner’s lawyer, said he welcomes Russia’s move to request his client’s handover as he expects “fair judgment” by the Russian court system.
The next step in healing the rift between Russia and Belarus may be the sale by billionaire Suleiman Kerimov of his stake, Sakhnova said. “We expect Kerimov to sell his stake in Uralkali regardless of the result of the Baumgertner case as Russia and Belarus need to renew their partnership and Lukashenko doesn’t want to work with him.”
Kerimov, who shares 33 percent in Uralkali with two partners, is getting offers to sell the stake. Billionaire Mikhail Prokhorov, former banker Vladimir Kogan, billionaires Mikhail Gutseriev and Vladimir Evtushenkov are among potential bidders, people said last month.
To contact the reporter on this story: Yuliya Fedorinova in Moscow at email@example.com