PotashCorp directors resign from scandal-hit SQM

OREANDA-NEWS. March 19, 2015. Three SQM board directors nominated by Canada?s PotashCorp resigned yesterday because of a heated dispute over the Chilean fertilizer company?s handling of a widespread corruption investigation in Chile.

"PotashCorp and its SQM board representatives have demanded an exhaustive, transparent and independent investigation by the company. SQM's board has not authorized a review which meets the standards we expect despite consistent efforts by our board representatives. Likewise our board representatives' emphatic requests that SQM fully and voluntarily cooperate with competent authorities, particularly in the case of the request by the Office of the Public Prosecutor for a voluntary delivery of information, have been rejected by a majority of the board," PotashCorp said today.

"It has become clear that given our minority and dissident position on the board, we are unable to ensure either that an appropriate investigation is conducted or that SQM collaborate effectively with the Public Prosecutor," PotashCorp said.

SQM informed Chile securities regulator SVS this morning of the resignation of Wayne Brownlee, Alejandro Montero and Jose Maria Eyzaguirre. A company spokesperson said the task of replacing them would be addressed at a new board meeting which has yet to be scheduled.

SQM and Chile?s Penta Bank are under investigation for alleged tax fraud tied to illegal campaign financing, among other charges.

The case has triggered a standoff between Chile?s national prosecutor Sabas Chahuan and the tax authority SII.

In a controversial decision yesterday, Chile?s constitutional court suspended the prosecutor?s investigation and summoned the parties to a 25 March meeting.

Critics say the court and the SII are acting under pressure from the government, which is seeking to protect senior officials and its allied lawmakers that allegedly benefitted from the scheme of fraudulent billings.

Following a closely monitored board meeting on 16 March, SQM resolved to deliver accounting information to the SII, rather than the prosecutor who had been requesting it.

Chahuan today demanded that the SII hand over the SQM documentation within 48 hours.

The government denies that it has interfered with the investigation. "We should abstain from pressuring and interfering with the institutions. … We have not had any formal communication with the constitutional court," presidential spokesman Alvaro Elizalde said today.

The Santiago stock exchange this morning suspended trading of SQM shares because of sharp volatility.

PotashCorp owns 32pc of SQM.