Belarus extends house arrest of Russian potash CEO

Reuters

* Potash chief detained in Aug after cartel collapsed

* Belarus infuriated by move that caused huge losses

* Russia may extradite Baumgertner

MINSK, Oct 28 (Reuters) - Belarus has extended by two monthsthe detention of the chief executive of Russian potash giantUralkali, who was arrested in August following thecollapse of a sales cartel which infuriated Russia's small ally.

Vladislav Baumgertner, 41, who has been charged with abuseof power and embezzlement, has been held under house arrest.Russia has said it will request his extradition - a possibleface-saving formula for both sides.

"The term of the investigation has been extended by twomonths... He (Baumgertner) remains under house arrest," PavelTraulko, an official for the Belarussian investigativecommittee, said on Monday.

Uralkali's withdrawal from a lucrative joint venture withstate-run Belaruskali in July rocked the global potash industryand threatened Belarus, which is heavily dependent on cheapRussian energy and financial aid, with big losses.

The soil nutrient accounts for 12 percent of Belarus's staterevenues and about 10 percent of export income. The cartel'sdemise angered President Alexander Lukashenko, Belarus'sauthoritarian leader.

Extradition could save face for Lukashenko, who has said hiscountry could hand over Baumgertner as long as Russia took stepsto prosecute him.

Uralkali has called the arrest of Baumgertner a provocationand has denied wrongdoing.

Belaruskali's output has plunged since August. But last weekits trading arm, Belarusian Potash Company (BPC), said it hadsigned a three-year draft supply contract with China's largestfertiliser supplier and distributor, Sinofert Holdings

Nevertheless, Lukashenko has expressed the hope that thelucrative partnership can be re-formed if there is a change inUralkali's ownership. He has estimated losses to Belarus fromthe cartel's collapse at $1.5-2.0 billion.

There has been intense lobbying by Russian businessmen tobuy the 21.75 percent stake in Uralkali held by its main owner,billionaire Suleiman Kerimov.

Kerimov himself values the company at $20 billion, industrysources in Moscow say.

Vladimir Evtushenkov, owner of the Russian oil-to-telecomsconglomerate Sistema , last week became thefirst to publicly throw his hat into the ring for a stake in Uralkali. Russian media have also named other possible bidders.

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