Fertilizer Markets and Finance

Yara International revealed it may sue the former owners of it Balderton trading operation, and unnamed “individuals”, as it revealed results of a probe into the bribery allegations which have led to charges against two bosses.

The fertilizer giant confirmed that an internal investigation found evidence of “unacceptable payments” in 2007 ahead of the formation of the Lifeco joint venture in Libya, and as Yara negotiated terms on a possible Indian tie-up, allegations over which it unveiled last year.

However, the probe had also found evidence of “a number” of unacceptable payouts too - totalling $15m, and spread between 2006 and 2009-10 - from the Swiss-based Balderton business, plus other payments “of several millions” of dollars “on no commercial basis”.

The probe, which has involved reviewing 740,000 documents and cost NOK30m in fees to law firm Wiersholm which undertook it, had also unveiled “other possible irregularities in relation to Yara’s/Balderton’s trading activities”.

‘Misleading information’

Furthermore, Yara had been given “misleading information” in the group’s acquisition of the first 50% of the Balderton fertilizer trading business in 2006.

Yara bought the oustanding 50% two years ago, for $130m.

“The former owner of Balderton has been notified that Yara is considering legal action on the basis of the findings from the investigation,” Joergen Ole Haslestad, the Yara chief executive, said.

Individuals, which the group did not name, may face “legal or other actions” too.

Mr Haslestad added: “It is disappointing to confirm that unacceptable payments have been made from Yara, but I am nevertheless satisfied with the way this matter has been handled.”

Second in two days

The findings of the probe, which has seen 29 people interviewed and taken Wiersholm personnel 16,000 working hours, comes a month after Oekokrim, Norway’s white collar crime unit, charged two members of Yara’s senior management team.

The pair were Tor Holba, the head of Yara’s so-called “upstream” manufacturing operations, and Hallgeir Storvik, the group’s chief financial officer and head of strategy.

Yara’s announcement also represents a second finding of bribery in two days by an agribusiness giant, after a Glencore subsidiary was convicted of paying-off a European Union official in return for market-sensitive information.

Glencore Grain Rotterdam paid for the official, Karel Brus, to have a holiday in France, besides meeting his mobile phone bills, in return for data on grain subsidies, in bribes paid in 2002 and 2003, a Belgian court heard.

Yara shares stood 1.3% higher at NOK256.20 in morning deals in Oslo.