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Bit harsh is it not?
The company could have dismissed the auditors, quietly or harshly, either way by allowing them resign they empowered them. Perhaps showing them the door first would have been an option. There better be an RNS one Monday, they have to come out fighting on this.
.... not to issue another swift RNS to calm the situation. ‘I’m due course.’ What does that mean! Really not on.
Looks like 190 could have been the bottom.
Now, i thought 200 could be the low, but it just keeps going south, dying to buy in but i don't know what the low will be.
Indeed, there is no such thing as a safe buy in here. This could rebound or quite likely continue going south. I doubt this is the only listed company conducting shady behaviour but what matters is they have been called out for it and will face substantial consequences in due course. So even if operating figures come in better than expected I don't see big buyers coming back in droves to buy stock. Avoid or sell and don't risk what you can't afford to lose.
Predictions anybody??.....I think low 180's...Apologies to all holders
I thought the charity itself was an unusual choice for Ferrexpo. a bit random.
This situation may affect the board, the board of directors and the general director, but not the company itself. In addition, based on the scandal, in the future this is hardly possible, so that I am in the purchase
Greed is what they live for
Quote: It would seem somewhat dumb for the CEO to have had any involvement with what Blooming Land were or were not doing with the funds handed to them.
You would have thought so, would'nt you? Dont underestimate people's stupidity and greed.
$600m.... The potential money laundering affected Ukraine, and they cannot pursue the company for more than was lost. that is the tax on $100m maximum. Interest at 10%. toss in legal fees. $20m maximum. The UK can have no part in this, the FCA are toothless in my view, and will wash their hands of it. The Swiss will look for tax. So for me in a doomsday situ this can't run above $100m. You didn't quite explain how it jumps from the $30-$100m range to $600m. That said the Market agrees with you.
Wasnt there some story about money for rail cars disappearing too, at some point?
You get the impression that FXPO are "obliged" to assist in what may well be some sort of mafia which if they do not ...some sort of sabotage or something would be the result...
Just a thought....
No wonder a comedian was elected on the anti-corruption election....
I wonder how long he will last/survive
This is good, but I do think the trading for the next four months is what is needed.
The issue is clearly with Blooming Land ...and its payments onwards to 3 related charitable funds which could then have been misappropriated.
The auditors made reference to “certain criminal legal proceedings” that had been launched against Blooming Land in Ukraine.
It would seem somewhat dumb for the CEO to have had any involvement with what Blooming Land were or were not doing with the funds handed to them.
Something clearly isnt right though
To date in 2019, realised prices for Ferrexpo's pellets have continued at high levels.
In 2019, the Group will continue its repairs and maintenance programme which will include a 75 day pellet line shutdown in 2H 2019. Overall, 2019 production volumes are expected to be in line with 2018 at approximately 10.6 million tonnes.
The cost of production in 2019 is expected to increase as a result of higher commodity input prices and local inflation in Ukraine. Year to date the Hryvnia has been broadly stable against the US dollar, appreciating by approximately 2%.
Capital expenditure in 2019 will be focused towards growth projects and is expected to be in the range of US$220 million to US$300 million, subject to realised pricing and market conditions. Of this, sustaining capital expenditure is expected to be in line with 2018. Investment of approximately US$35 million is planned for the Concentrator Expansion Programme 1 ("CEP1"), which is anticipated to increase pellet production to approximately 12 million tonnes per annum by 2021. In addition, subject to market conditions and available cash flows, Ferrexpo will commence construction on a new press filtration plant and other pellet capacity upgrade projects as well as purchase of additional rail cars.
Granto, I respectfully disagree. If investigation shows this was tax evasion and money laundering, lots of parties will get drawn in multiple criminal and civil lawsuites. The Ukrainian authorities will levy unpaid tax plus penalties (100% of unpaid tax) plus interest, so this alone could amount to some $60-80m. The anti-money-laundering authorities in Ukraine, Switzerland and UK may investigate and fine the company further. That could be several hundred million in total. The company will sue the CEO and the charity. The charity might countersue the company. There will be criminal charges brought against the CEO and possibly the company and its directors. There will be legal costs running into $20-30m per year for the next 3-4 years. So, all in, this could be a $500m affair. And that's not considering damange to management credibility and company's reputation. So, all considered, a $600m drop in market cap is reasonable and at the end it quite possibly will be closer to $1bn. I'm guessing 170p would be a reasonable level for SP to settle at, but would not be surprise if it will test 130p level as someone here suggested.
Last year Glencore faced DOJ probe and market cap fell by $10bn despite the highest ever fine for corrupt practices being less than a billion. And Glen's sp stayed down since, so we can expect same happening here. Having said all this, I do think it's a good buying opportunity in the long term and will be looking to enter at around 170-180p level (no advice intended - DYOR and usual caveats apply). GLA
Will they suspend trading ? SP in free fall
They are certainly squeezing the pips out of it....
I rarely call my trades, but I am buying this now, It is a oversell in my view. The company needs to issue a RNS Trading update for the first 4 months. DYOR
The CFO must act quickly and issue a Trading Update for the first four months, and include in it, 1, that the Eurobond was paid back in April $170m , 2, the sales figures, 3 costs 4 guideline profit for the four months, 5 a short term projection for the 3 months ahead. ... This should show the company bagged $180m EBITDA in the last 4 months. This is essential to steady the boat and give confidence here.
When I saw the price drop I got a surprise, a mini shock, when I read the RNS I was calm. Yes it relates to a portion of the $100m but I wanted a worse case scenario appraisal. The auditor has already signed off on last year's accounts, this is all to do with the potential money laundering of a maximum of $100m that is being denied by the company. Lets say for a moment this goes to court, the worst case, is pay the tax on the full $100m as if it were drawings, that is about $30m. That's it. The auditor wants no part of the potential case and clearly thinks it cannot back the Board of Directors defence of the matter. They may well be right, The CEO If, and I stress IF is proven guilty of tax evasion or using charity to launder money then in theory he faces jail, but given he'll have a defence he already believes makes him innocent of all charges, I suspect at worst he'll get a huge fine, and a humiliating tongue lashing off the judge, and the money will have to be paid. This is the worse case scenario as I see it. The downside is $30m yet the drop today has knocked several $100m off the Market Cap....a complete oversell. Normally if the Auditor walks, so should you, but this is different, this is not a money decision, it is reputation. The CEO is going to go through some serious personal embarrassment here whether he is innocent or guilty, but the company has not changed bar the $30m potential tax payback and repetitional damage this causes.
Have we finally hit bottom ?
You was right!!
Where to next? I´ve got 150 - 180p possible.
Of course, this is why it´s dropped and I assume that Deloitte believe CEO was involved.