A probe into the stake in Russia's leading apatite concentrate producer was at the core of the prosecution case against the jailed founder of bankrupt oil company Yukos, Mikhail Khodorkovsky, and his two business associates Platon Lebedev and Andrei Krainov.
On November 3, 2006, the Arbitration Court rejected a suit from the Federal Agency for the Management of Federal Property. The decision was unprecedented because it was made by the arbitration jury, against the opinion of the presiding judge, according to Russian business daily Kommersant.
In its claim for the Apatit shares, the federal property agency cited a court ruling of February 1998, which had invalidated a 1994 contract on the sale of 20% of Apatit shares by the government of Murmansk in Russia's far northwest - where Apatit is based - to Volna, a company owned by Khodorkovsky's associate Krainov, the paper said.
In May 2005, Moscow's Meshchansky court sentenced Khodorkovsky and Lebedev to eight years each, and Krainov received a suspended five-year sentence. The defendants were also found guilty of failing to abide by the court ruling on the 1994 Apatit deal.
"The verdict said an organized crime group had been formed to resell [Apatit] shares repeatedly so that it would be impossible to implement the court ruling and return them to federal ownership," an agency official said in court last November.
Lawyers acting for Fosagro have said the company obtained about 30% of Apatit shares from three Cyprus-based companies, which had bought the stock in 2002, Kommersant said.
The defense lawyers also said the three-year limitation period on the federal agency's lawsuit had expired because the agency learnt about Volna reselling the shares in 1999 but did not file any suit.
The federal agency responded that the limitation period began in 2004 when the shares were seized as part of the Khodorkovsky case, saying that only then it became clear who the agency should be suing, the paper said.
