A day after extradition from house arrest in Belarus, Uralkali CEO was charged with abuse of office by Russian authorities and placed in a pretrial detention center in Moscow where he shared a cell with three other inmates. Baumgertner, who has since been reelected to the Uralkali board of directors, is now under house arrest in Russia and has been fitted with an electronic bracelet so officials can monitor his movements.
Russian authorities came under pressure from Belarus to pursue charges relating to the breakup of the Belorussian Potash Company earlier this year. Baumgertner maintains his innocence but Belaruskali is seeking retribution for the revenues lost as a result of the split.
The move is viewed as largely symbolic and while the fate of the joint venture is still questionable at best, Russia and Belarus are anxious to mend national relations. Along with Kazakhstan, Belarus and Russia are partners in Moscow's Customs Union, aimed at uniting former Soviet bloc nations in a trade confederation.
This comes as the citizenry of Ukraine revolts against President Yanukovych's refusal to ink an Association Agreement with the E.U. earlier this month. Russia is gathering its friends and has encouraged Ukraine to side against Brussels, in Moscow's favor.
With Baumgertner back in Russia and still in possession of his seat on the board of directors, the potash saga may be coming to an end. Potash prices continue to bleed, however and North American potash producers are feeling the pinch, forcing layoffs at a number of PotashCorp's mines and production facilities.
Baumgertner has become the scape goat for the whole ordeal and his prosecution by Russian authorities is seen by industry watchers as a move to appease Belarus and give the appearance of due diligence. The fact that Baumgertner was reelected to the board of Uralkali suggests the CEO may soon resume life on the outside, but Russia will need to smooth the transition by pursuing charges. We fully expect the announcement of his acquittal, but it may take some time and political gymnastics before Baumgertner is a free man.