Belarus Arrests Uralkali CEO After Meeting with PM

Belarus Arrests Uralkali CEO After Meeting with PM

"He has been accused of abusing authority or power. He has been placed under custody," Belarussian Investigative Committee spokesman Pavel Taraulko said.

MINSK - Belarus on Monday arrested the chief executive of Russian potash giant Uralkali (IW 1000/900) for alleged abuse of authority, detaining him at Minsk airport hours after he had held talks with the Belarussian prime minister.

The extraordinary arrest of Vladislav Baumgertner in the capital Minsk came three weeks after Uralkali severed links with its Belarussian partner Belaruskali, triggering a crash in the prices of global manufacturers of the fertilizer.

"He has been accused of abusing authority or power. He has been placed under custody," Belarussian Investigative Committee spokesman Pavel Taraulko said, without giving further details.

Under this charge, Baumgertner could face between three to 10 years in jail.

The Belarussian Investigative Committee said that it was also investigating Suleiman Kerimov, the billionaire owner of Russia premier league team Anzhi Makhachkala and a major Uralkali shareholder, for unlawful activities.

Four other managers at Uralkali have also been put on a wanted list by the Belarussian Investigative Committee in the probe. But they are currently all believed to be in Moscow.

Uralkali spokesman Alexander Babinsky said that Baumgertner had held a meeting with Belarussian Prime Minister Mikhail Myasnikovich and he was then detained at Minsk airport on departure.

Uralkali: Actions Unacceptable

"Such actions are unacceptable," Babinsky said in comments broadcast by Russian state television.

"The chief executive was in Minsk at the personal invitation of the prime minister. Vladislav Baumgertner had met the prime minister today and afterwards on departure at Minsk airport he was arrested."

The Interfax news agency said the Russian embassy in Minsk had sent a note to the Belarussian foreign ministry requesting a meeting with Baumgertner.

Baumgertner appears to have been arrested in his capacity as the chairman of the supervisory board of the now defunct joint venture between Uralkali and Belaruskali, the Belarussian Potash Company (BPC).

The Russian company announced July 30 it had decided to halt all export sales through its joint venture with Belaruskali and handle all export volumes itself.

Baumgertner said in a statement at the time that cooperation with the Belarussian side had hit "deadlock" after President Alexander Lukashenko of Belarus cancelled BPC's exclusive right to export Belarussian potash.

The Belarussian investigators claim to have uncovered an illegal scheme for BPC executives to enrich themselves to the detriment of their export clients and ordinary Belarussians.

'War of Words' Escalates

"What has so far been a war of words has now entered the next stage, with potential consequences at the state level," Deutsche Bank analysts said in a note to clients.

"The arrest is taking Uralkali hostage and may make the company dysfunctional," they added.

The announcement by Uralkali was seen as representing an end to the cartel-like system that has supported the global potash market and sent the share prices of both the Russian firm and its global competitors tumbling.

The move by Uralkali, which accounts for about 20% of global potash production, underlined the fragility of the market for potash which is hugely sensitive to any hint of over-supply.

The move cost Uralkali shareholders dear, including Kerimov who is believed to have lost up to $500 million in the collapse of its share price.

Many commentators believe this caused him to decide mass cost savings at Anzhi Makhachkala, offloading almost all its star players including Willian of Brazil who is going to English Premier League high-flier Chelsea.

Potash is prized for its potassium, which is hugely effective in increasing crop yields and in recent years has been particularly in demand in China.

Tatyana Kalinovskaya, AFP

Copyright Agence France-Presse, 2013 

TAGS: The Economy
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