Russia demanded yesterday the release of the head of Russian company Uralkali, whose arrest in Belarus threatens to turn a business dispute that shook the $20 billion (€14 billion) global potash market into a major diplomatic row.
Vladislav Baumgertner, chief executive of the world’s largest potash producer, was detained on Monday at the airport of the Belarusian capital Minsk after being invited to secret talks with Prime Minister Mikhail Myasnikovich.
Television footage released by the Belarusian Investigative Committee, the former Soviet republic’s top crime-fighting agency, showed Baumgertner being searched, his legs spread and hands against a wall. He was later pictured handcuffed.
President Alexander Lukashenko appears to have taken it as a personal affront when Uralkali quit a cartel last month with a Belarusian state firm producing potash, a fertiliser ingredient.
The main owner of Uralkali, which controls 20 per cent of the world market, is Suleiman Kerimov, a billionaire with close ties to President Vladimir Putin’s Kremlin administration.
Russia’s Foreign Ministry summoned the Belarusian ambassador to issue a rebuke, warning of unspecified consequences for bilateral ties. The two countries allow passport-free travel and are members of a free-trade zone.
“It is impermissible to detain a person on his way home after he came for talks at the invitation of the Belarusian government,” Deputy Foreign Minister Grigory Karasin told news agency Interfax.
Russia’s ambassador to Minsk asked prosecutors yesterday afternoon to release Baumgertner. Officials said they would review the case, but stressed they were dealing with a crime that had inflicted severe economic damage on Belarus.
It is impermissible to detain a person on his way home after he came for talks at the invitation of the Belarusian government
“We hope our partners will consider this question in the spirit of the law, not on the basis of emotions and political connections,” said Foreign Ministry spokesman Andrei Savinykh.
Lukashenko, in power since 1994, has a history of manoeuvring between Russia and Europe to shore up his isolated leadership and Soviet-style economy.
“Lukashenko loves trading hostages; he trades political hostages with the West and economic hostages with Russia,” said Dmitry Oreshkin, an independent Russian political analyst.
Baumgertner, who faces up to 10 years in jail on charges of abusing his powers, could in effect be ransomed by Belarus in return for economic concessions by Russia, analysts speculated.
Uralkali chairman Alexander Voloshin, a former Kremlin chief of staff, said he was outraged by the prosecution of Baumgertner. In a statement he said the charges “simply look clumsy” and that business disputes “must not be resolved in this way”.
The market for potash has long been dominated by a handful of players led by the Belarusian Potash Co (BPC), a marketing venture between Uralkali and state-owned Belaruskali.
Together with Canpotex – which groups North American firms Potash Corp, Agrium and Mosaic – BPC controlled 70 per cent of sales, keeping prices high for farmers.
Angered by a law passed in Belarus last year allowing Belaruskali to sell product outside the marketing venture, Uralkali quit the cartel on July 30, saying it would seek to maximise its own volumes and warning prices could fall by as much as 25 per cent this year.
The recriminations, and a threat by Belarus to hold Baumgertner for at least two months, suggest there is little hope of early reconciliation.