Ferrexpo says charity funds 'could have been' misappropriated

(Sharecast News) - Ferrexpo on Friday said some of the money it gave to a charity "could have been misappropriated".


The Ukraine-focused iron pellet producer commissioned an independent probe into the donations to the Blooming Land charity which was set up to manage Ferrexpo's corporate social responsibility programme. It said it had terminated its relationship with the organisation.

Ferrexpo said the investigation found none of its directors, management or employees had any involvement, but could not explain "the ultimate use of all of the funds".

"Indications therefore remain that some of the funds could have been misappropriated. The board is considering further steps in this regard," the company said in a statement.

The committee was established in February to investigate whether Ferrexpo's philanthropic efforts were being used to cover up money laundering and tax evasion after one of its units gave the foundation about $110m over the past six years.

The company suspended payments to Blooming Land in May 2018 and said in its 2018 annual report that it had been informed of a number of irregularities, including inconsistencies in copy bank statements provided by the charity.

A February court filing from Ukrainian state prosecutors said the charity had damaged state interests, while other court documents imply that Blooming Land laundered money on behalf of unnamed businesses.