MOSCOW, August 29 (RIA Novosti) - Russian billionaire Suleiman Kerimov, a major shareholder in Russian potash giant Uralkali, should face criminal charges in Belarus, local investigators in Minsk said Thursday.
“As of today, the records received by the Investigative Committee give grounds for opening a criminal case against Uralkali shareholder Suleiman Kerimov and detaining him,” said Pavel Traulko, representative of the Belarusian Investigative Committee.
Vladislav Baumgertner, chief executive of Uralkali, the world's largest potash producer, was detained in Minsk Monday after attending a meeting with Belarusian officials including Prime Minister Mikhail Myasnikovich, and charged with abuse of power, according to the Belarus Investigative Committee. Kerimov had also been invited but did not attend, Uralkali said, the Financial Times reported.
Russia’s Uralkali and Belaruskali, a Belarusian potash producer, had previously worked together in a cartel on the potash market, and channeled all their exports through one trading company, the Belarus Potash Corporation. Belarusian Potash Corporation was owned by Belaruskali (45 percent) Belarusian Railways (5 percent) and Uralkali (50 percent).
But in June Uralkali’s Baumgertner accused Belaruskali of selling some potash outside the cartel agreement, which “destroyed the fundamentals of our prolonged fruitful cooperation,” the Financial Times reported.
In July, the cartel collapsed when Uralkali pulled out, causing a huge fall in its capitalization as well as that of six other leading producers, the FT said, and prompting predictions that potash prices across the world could fall as much as 25 percent.
The Belarusian authorities claimed Monday Baumgertner’s actions had caused grave damage to the public interests of Belarus, and losses to the Belarusian Potash company.
Uralkali reacted swiftly to the arrest of its CEO Monday, blaming the Belarusian authorities for the incident. "We are suprised with what has happened and consider it a provocation," PRIME business news agency quoted Uralkali representative Alexander Babinsky as saying.
The move triggered outrage in the Russian government, with the Belarusian Ambassador being summoned to the Russian Foreign Ministry to explain the incident.
Potash makes up around 8 percent of Belarus’ exports and Belaruskali is one of its largest industrial enterprises. A major fall in potash prices would therefore deal a severe blow to Minsk, which has suffered from major falls in the Belarusian ruble in recent years.
Uralkali has long coveted Belaruskali and was in negotiations last year to buy a stake in the company, but talks fell apart after Belarusian President Alexander Lukashenko said he would not sell a controlling stake in the state-owned firm.