Russian fertilizer giant in Norwegian corruption scandal

Yara has been doing murky business with the Russian company Phosagro.

The Phosagro company is believed to be part of the major corruption case currently unfolding around Yara, the Norwegian fertilizers producer. The case directly involves Apatit, the Phosagro subsidiary based in the Kola Peninsula.


After more than two years of police investigations, new details come to the surface about corrupt practices in the Yara company. The Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (ØKOKRIM) now extends its charges against the company to include also shade business in relations with the Russian fertilizer giant Phosagro.

From before, Yara is suspected of serious corruption in Libya and India. Norwegian police has already made clear that Yara will get the biggest fine ever imposed on a Norwegian company.

According to Økokrim, Yara might have bribed Russian middlemen for several tens of millions of euros. Through its Switzerland-based trading company, Yara in fall 2011 transferred its ownership stake in a Russian mining company – most probably Apatit — to a Cyprus-based company with unknown owners. The stake had a value of about 800 million NOK (€99 million). An estimated 700 million NOK of that sum ended up in the pockets of the middlemen, newspaper Dagens Næringsliv writes.

Allegedly, Phosagro had demanded that Yara sold its stake in Apatit as a condition for granting Yara a favorable five-year supply contract.

As previously reported by BarentsObserver, Yara owned 8,2 percent of Apatit though the company Nordic Rus Holding, a joint venture with Akron. With the takeover of control in the Nordic Rus Holding, Phosagro consequently strengthened its control also in Apatit. Today, three years later, Phosagro controls close to 100 percent in Apatit.

The main owner of Phosagro is Andrey Guriev, the former senator for Murmansk Oblast.

Phosagro is also well-connected with Norway through its board Chairman Sven Ombudstvedt, the Norwegian who has served in the company board for several years. Paradoxically, Ombudstvedt himself has a background from Yara, where is for a longer period worked in the company management team. Since 2010, he has also been president and CEO of Norske Skog, the Norwegian paper producing company.