Ferrexpo hit with corporate rights restrictions for Ukraine subsidiaries

Reuters | March 26, 2024 | 

Ferrexpo’s FPM mine. (Image courtesy of Ferrexpo)

Iron ore pellet producer Ferrexpo said a court has prohibited the transfer of ownership and other shares-related corporate rights of the company’s subsidiaries in Ukraine.


“It is understood that the restrictions are part of an ongoing series of legal proceedings against Kostyantin Zhevago relating to Bank Finance & Credit and are not related to the Ferrexpo Group,” the London-listed miner said on Tuesday.


Why it’s important

Ukrainian billionaire Zhevago, Ferrexpo’s biggest shareholder, has been facing legal challenges amid Ukraine’s efforts to clamp down on corruption, which is vital to meet the conditions for joining the European Union, despite Russia’s full-scale invasion.

Context

Zhevago in January won a bid to throw out a London lawsuit over allegations he embezzled money from the now bankrupt lender Finance & Credit Bank.

Ukrainian prosecutors have also taken action in the Ukrainian courts against Zhevago and frozen shares held by Ferrexpo, in its three Ukrainian subsidiaries.

The restrictions announced on Tuesday are separate to those under the share freezes, Ferrexpo said.

The response

Ukraine-focussed Ferrexpo said it has “no intention, and never has had any intention of transferring shares in its subsidiaries”.

Zhevago, who is also facing legal proceedings related to Finance & Credit Bank in which he had a 95% indirect shareholding before its 2015 collapse, has repeatedly denied any wrongdoing.

What’s next

Ferrexpo said it was currently analyzing the potential legal and other remedies available and intends to “vigorously defend its rights”.

(By Yadarisa Shabong; Editing by Shounak Dasgupta)