Ukraine police complete initial probe into four Ferrexpo Poltava managers
By Josh White
Date: Thursday 16 Jan 2025
(Sharecast News) - Ukraine-focussed iron ore producer Ferrexpo updated the market on allegations against four senior managers at its Ferrexpo Poltava Mining (FPM) subsidiary on Thursday, following the completion of an initial police probe.
The country's Prosecutor General's Office had accused the managers of illegally mining and selling waste by-products from iron ore processing last year.
Ferrexpo maintained that the materials were standard waste from iron ore crushing and not separate mineral resources.
It said FPM had been selling the waste products until ceasing sales in September 2021, with all transactions previously inspected by Ukraine's State Service for Geology and Subsoil.
The National Police had now completed their pre-trial investigation, with the case awaiting a hearing in a first-instance court.
Ferrexpo, citing advice from Ukrainian legal counsel, said it believed the accusations were unfounded.
It said its operations remained unaffected, adding that it would provide further updates as appropriate.
The development added to a series of legal challenges Ferrexpo had faced in Ukraine.
In early 2024, a Ukrainian court confirmed a $125m lawsuit against FPM related to alleged embezzlement involving the now-defunct Finance and Credit Bank, previously owned by Ferrexpo's major shareholder, Kostyantyn Zhevago.
Ferrexpo expressed its intent to vigorously defend its position in that case.
Additionally, in March last year, Ferrexpo reported that FPM's bank accounts were frozen by court order at the prosecutor's office's request, stemming from an investigation into alleged illegal mining activities.
The company argued that the action jeopardised salary payments to over 7,500 employees and contractors.
Ferrexpo had also been involved in protracted legal disputes over ownership stakes in its Ukrainian subsidiaries.
In April 2023, Ukraine's Supreme Court ruled in favor of Ferrexpo, affirming its ownership of a 40.19% stake in FPM after former shareholders sought to invalidate a 2002 share purchase agreement.
At 1135 GMT, shares in Ferrexpo were up 0.61% at 99p.
Reporting by Josh White for Sharecast.com.
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