Sept. 6 (Bloomberg) -- Belarus will keep Vladislav Baumgertner, the chief executive officer of Russian potash producer OAO Uralkali, in jail as it builds a case against him for abuse of office.
A judge rejected a plea from Baumgertner’s legal team to free him or ease the terms of his custody, Dmitry Goryachko, one of his lawyers, said today at a courthouse in Minsk. While the executive’s two-month detention ends Oct. 26, it may be prolonged under Belarusian law.
Baumgertner’s ordeal stems from his July decision to end a marketing joint venture with Belarus’s Belaruskali, plunging the former Soviet Union’s two largest potash producers into a dispute and roiling the $20 billion global market for the crop nutrient. He was detained at the Minsk airport after Belarus Prime Minister Mikhail Myasnikovich invited him for talks.
“Vladislav remains a hostage in this situation and will have to stay in prison until Russia and Belarus resolve the potash dispute at the intergovernmental level,” Alexey Basistov, a Moscow-based lawyer for the CEO, said by phone.
Uralkali shares dropped 1.8 percent in Moscow and 1.6 percent in London as the biggest declines in more than a week ended three days of gains and left the company’s market value at $14.3 billion.
Russia is demanding the “unconditional and immediate” release of Baumgertner and his unimpeded return home, Russian Deputy Foreign Minister Grigory Karasin told Belarusian Ambassador Igor Petrishenko in Moscow today, according to a statement on the Russian ministry’s website.
The Kremlin has remained quiet on the matter because it wants to avoid driving the dispute into a dead end, President Vladimir Putin said today at a briefing after the Group of 20 summit in St. Petersburg. He said he hasn’t spoken to his Belarusian counterpart Aleksandr Lukashenko about Uralkali.
Uralkali quit the Belarusian Potash Co. joint venture because Belarus “violated” their agreement by allowing Belaruskali to export some of its potash independently, the Russian company said at the time. Uralkali said it would work at full capacity, a strategy that would lead to a decline in potash prices.
Belarus charged Baumgertner, who is also chairman of BPC, with abuse of office. He faces as long as 10 years in prison and may forfeit property if convicted. For now, the CEO is being held in “normal conditions,” Goryachko said. The court barred the lawyers from discussing why the plea was rejected, he said.
The case was heard by Judge Natalia Pykina in the Partizanskiy district court in Minsk. Along with Lukashenko, she is among Belarusian officials barred from entering the European Union after her 2011 sentencing of an opposition activist to 3 1/2 years in a high security prison.
Basistov said in a Sept. 4 interview his legal team would argue that were no grounds for the CEO’s detention and that he should be freed, or at least the terms of his confinement should be eased.
Belarus is seeking to arrest Uralkali billionaire investor Suleiman Kerimov and four other employees of the fertilizer producer through Interpol.
Belarus is scheduled to receive the final $440 million of a Russian-led $1.3 billion bailout loan by the end of the year, depending on carrying out policy reforms, including state asset sales. Lukashenko ruled out a sale of Belaruskali, saying only “an idiot” would dispose of the company at a low price, Interfax reported today from Minsk.
Lukashenko called on foreign diplomats to help market potash abroad, state-run agency Belta reported, citing Lukashenko.
Uralkali has repeatedly rejected Belarus’s allegations against Baumgertner and its other employees. The company will seek help from “appropriate Russian authorities” to help stop “politically motivated persecution” of its staff, it said this week.
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