RE: "Confiscation" of assets by UKR Gov.27 Oct 2023 13:44
The chair of UK-listed Ukrainian miner Ferrexpo has urged Kyiv to spare the company as Ukrainian prosecutors seek damages from its largest shareholder who is wanted in the country for alleged embezzlement involving a now-collapsed bank.
Speaking in London, Ferrexpo chair Lucio Genovese said the legal actions risked undermining investor confidence in Ukraine, just when the war-torn country needs to attract foreign capital.
“Ferrexpo is caught up in a dispute that has nothing to do with us,” Genovese said in an interview. “Ultimately, the Ukrainian authorities risk penalising British and American ordinary citizens whose pensions are invested in Ferrexpo.”
Genovese said the company planned to invest $3bn in Ukraine “over the coming years”.
Ferrexpo, which turns iron ore into pellets for steelmakers across the globe and was listed on the London Stock Exchange in 2007, has been hit by several court cases or investigations by Ukrainian authorities seeking to recover assets from Kostyantin Zhevago, its billionaire founder, who together with his family holds a 49.5 per cent stake.
Shares in Ferrexpo have fallen 52 per cent in London this year, bringing its market capitalisation to £464mn. The company’s output has tumbled 58 per cent in the first nine months of this year compared with the same period in 2021 because of energy, logistical and other constraints related to Russia’s full-scale invasion of Ukraine.
Zhevago was arrested in the French ski resort of Courchevel last year following a request from Ukrainian prosecutors seeking his extradition relating to the collapse of Finance and Credit bank in 2015. They have also taken action in Ukrainian courts to obtain more than $1bn in damages from Zhevago and have frozen shares held by Ferrexpo in its three Ukrainian subsidiaries.
Ferrexpo believes it is the victim of an orchestrated campaign to punish its largest shareholder. It says the legal swoop against its subsidiaries is illegal, that it was never party to the loans agreements Zhevago made with the collapsed bank’s creditors and that any attempt to seize Ferrexpo’s assets would penalise other shareholders.
Other large investors in Ferrexpo include BlackRock, Schroder Investment Management, Acadian Asset Management, HSBC and Vanguard Group.
President Volodymyr Zelenskyy is under pressure from the Ukrainian public, the EU, US and IMF to clamp down on the country’s oligarchs.
Zhevago, now 49, became post-Soviet Ukraine’s youngest billionaire and served as an MP for two decades. He also owns a TV station.
Ukrainian prosecutors say Finance and Credit made fraudulent loans to companies ultimately owned by Zhevago. The bank collapsed in 2015, inflicting losses on its creditors including the National Bank of Ukraine and on the country’s Deposit Guarantee Fund. “We are confident that President Zelenskyy is committed to the rule of law,” Genovese said. “It is important that he upholds the rights
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