* Shareholders will vote for new SQM board on Friday in Santiago
* Chairman and Pinochet aide Ponce is not among nominees
* New Potash Corp nominees suggest a deal has been struck
* SQM is top global supplier of lithium, iodine (Recasts with chairman stepping down, adds nominees)
By Rosalba O‘Brien and Felipe Iturrieta
SANTIAGO, April 22 (Reuters) - Chile’s SQM, the world’s biggest producer of key battery ingredient lithium, will get a new board on Friday minus the man who has led it for nearly three decades, as the scandal-plagued company moves to reassure investors about its corporate governance.
SQM , also an important supplier of iodine and other chemicals, was privatized in the 1980s under then-dictator Augusto Pinochet. His son-in-law at the time, Julio Ponce, bought up stakes that made him a billionaire and chairman of the company.
But shortly after an insider-trading probe last year that saw Ponce and others fined, the company has become mired in a fresh scandal over illicit campaign financing, largely of Pinochet’s right-wing party the UDI.
The scandal has convulsed the political and business elite in Chile and already claimed the scalp of Patricio Contesse, SQM’s chief executive, who was fired last month for refusing to cooperate with authorities.
Now it has unseated Ponce himself.
On Friday, shareholders will vote on the composition of the eight-member board, triggered by the resignation of three representatives of Canadian shareholder Potash Corp, who last month stepped down in anger at SQM’s handling of the situation.
Late on Wednesday, a statement from Ponce’s investment vehicle, Pampa Calichera, appeared to show that the two sides had come to a deal and that Ponce had agreed to go in order for SQM to move forward, with his name conspicuously absent from a list of board nominees.
Contesse’s son, currently a board member, is also not on the list.
“Pampa Calichera and Potash Corp support such eight nominees and are pleased with the changes to SQM’s board and governance structure,” the statement said.
If approved, the board will be balanced between four Ponce allies and four outsiders.
Ponce’s nominees include three current board members plus Dieter Linneberg, a Chilean academic specializing in corporate governance.
Potash Corp has put forward three new nominees from within its ranks - two company veterans with corporate governance backgrounds, Joanne Boyes and Robert Kirkpatrick, plus a mining expert.
SailingStone, the largest shareholder of SQM’s actively traded ADRs, has nominated Canadian lawyer and former securities regulator Edward Waitzer to represent minority shareholders. SailingStone called last month for Ponce to exit, saying his continued presence was “inappropriate.”
Many in the market concurred, particularly given the around 20 percent decline in SQM’s value since the scandal broke in February. (Additional reporting by Euan Rocha in Toronto; Editing by Ted Botha and Leslie Adler)