The ongoing potash war between Russia and Belarus took a surprising turn Monday, as Moscow announced it has launched a probe into the financial dealings of Vladislav Baumgertner, CEO of local fertilizer group Uralkali (LON: URALL).
Baumgertner, who was arrested in Belarus’ capital in August during an official visit to the prime minister, was freed only late last month, but remains under house arrest in Moscow’s neighbour and close ally.
He has been accused of abusing his power as head of a now-defunct partnership between Uralkali and state-run potash miner Belaruskali. The company, Russia's largest potash producer dismissed the allegations, saying they were “politically motivated.”
Through their joint marketing organization Russian and Belarus giants controlled some 40% of the global market for the soil nutrient.
But the July break-up sent stock prices in the sector tumbling and creating huge problems for Belarus, which is heavily dependent on state-owned Belaruskali as a source of revenue for the struggling economy of the ex-Soviet republic.
Potash, in fact, accounts for 12% of Belarus’s state revenue and about 10% of export income.
Belarusian President, Alexander Lukashenko, has said he wouldn’t return Baumgertner unless he was to face prosecution in Russia.
Analysts quoted by FT.com (subs. required) is not clear yet whether Moscow does intend to press charges against Baumgertner, or whether the investigation is a means to get him back to Russia.
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