Uralkali CEO Vladislav Baumgertner is currently under house arrest in an apartment in the Belarusian capital Minsk.
Belarus agreed to extradite OAO Uralkali chief Vladislav Baumgertner to Russia, days after a proposal to change ownership of the potash producer that may end a dispute over joint global sales of the key crop nutrient.
The transfer of the biggest potash supplier’s chief executive officer, who is under house arrest in an apartment in the Belarusian capital Minsk, is expected "soon," the Russian Prosecutor General’s Office said today in an e-mailed statement, citing a decision by its Belarusian counterpart yesterday.
Baumgertner, 41, was arrested on Aug. 26 and spent a month in a Belarusian KGB jail after he withdrew his company from a joint venture with potash supplier Belaruskali. The extradition agreement comes days after a buyer was found for the stake of Uralkali’s biggest owner, billionaire Suleiman Kerimov. Belarus had called for a change in ownership before any prospect of a resumption of joint potash marketing.
The likelihood that Baumgertner "will resign soon is high," Kirill Chuyko, BCS Financial Group analyst, said by phone. "A lot depends on Belarus President Alexander Lukashenko’s attitude to Baumgertner, and given that it may be not warm, it would be easier for Uralkali to negotiate the terms of the new trading venture with Belarus with another CEO."
Uralkali rose as much as 1.1 percent in Moscow trading after the prosecutors’ statement. It was 0.3 percent lower at 168.37 rubles at 3:31 p.m.
Russia opened a case against Baumgertner last month after Lukashenko demanded the country press criminal charges as a condition for his extradition. A Moscow court placed the CEO under arrest in absentia, Interfax said on Oct. 21, citing court spokeswoman Nataliya Romanova.
Uralkali accused its Belarusian partner of selling cargoes outside their marketing agreement, which accounted for 40 percent of global exports of the crop nutrient, and said this was the reason for it quitting the venture at the end of July. Berezniki-based Uralkali said at the time that it would boost output, favoring volume over price. The decisions sent the market into a tailspin, dragging down producers’ shares and depressing prices.
Petr Kiselev, a spokesman for the Belarusian Prosecutor General’s Office, confirmed the extradition agreement, without elaborating on the timing. Alexey Basistov, Baumgertner’s lawyer in Moscow, didn’t immediately answer phone calls seeking comment. Uralkali’s press service declined to comment.
Baumgertner who is also the chairman of the trading company is "very ethical," Uralkali Deputy Chairman Robert Margetts said in London yesterday before the prosecutor’s statement. "We find it very difficult to believe he was doing anything other than following through the directions of the board. Two-and-a- half years I’ve known him. He’s an outstanding man."
Baumgertner was arrested after traveling to Minsk at the invitation of Belarus Prime Minister Mikhail Myasnikovich to discuss the dispute. His arrest prompted talks between Kerimov, who shares a 33 percent stake in Uralkali with two partners, and potential investors over their holdings.
Billionaire Mikhail Prokhorov’s Onexim Group this week agreed to buy Kerimov’s 21.75 percent.
Belarusian-born billionaire Dmitry Mazepin may later buy the stake of about 11 percent that Kerimov’s partners hold, three people with knowledge of the plans said.