Sunday 17 November 2019

Scandal-hit mining boss stands down to resolve new allegations of wrongdoing

London-listed Ferrexpo said billionaire Kostyantin Zhevago will quit temporarily.

Mining giant Ferrexpo has said its chief executive will stand down while an investigation into a previous business collapse is investigated (Ferrexpo/PA)
Mining giant Ferrexpo has said its chief executive will stand down while an investigation into a previous business collapse is investigated (Ferrexpo/PA)

By Simon Neville, PA City Editor

The boss of a scandal-hit mining business Ferrexpo has stepped down to focus on “resolving certain matters” over the 2015 collapse of a bank he used to own.

Kostyantin Zhevago, the billionaire behind the Ukrainian-focused miner, said he would quit temporarily while a criminal investigation into the collapse of the Finance and Credit bank takes place.

Less than a month ago, the first deputy of Ukraine’s State Bureau of Investigations said on Facebook that Mr Zhevago had been handed a “notice of suspicion” over the collapse.

The post said: “Today, in absentia, a suspicion was handed to the former People’s Deputy Konstantin Zhevago, who had previously been tested for involvement in the criminal scheme for embezzlement and legalisation of 2.5bn hryvnias of Bank F&C.”

The board ... believes that this temporary change of leadership is necessary and in the interests of all shareholders to enable Mr Zhevago to focus on ongoing matters in Ukraine without impacting the company's operations Steve Lucas, Ferrexpo

Mr Zhevago denies any wrongdoing and the company issued a statement earlier this month claiming the notice had not been served.

Finance and Credit collapsed in 2015, having previously held a substantial amount of Ferrexpo’s cash.

The businessman will remain on the board of the miner – in which he has a 50% stake – but will hand power to his finance chief, Chris Mawe.

Chairman Steve Lucas said: “The board, including Mr Zhevago, believes that this temporary change of leadership is necessary and in the interests of all shareholders to enable Mr Zhevago to focus on ongoing matters in Ukraine without impacting the company’s operations.

“Mr Zhevago continues to have the full support of the board.”

The boardroom has faced significant upheaval in the past year, with accusations of poor corporate governance and oversight.

The company’s auditor resigned earlier this year following a row over potential links between Mr Zhevago and a Ukrainian charity, Blooming Land, which had received funds from Ferrexpo.

An independent review committee found that donations from Ferrexpo “could have been misappropriated” although no-one from the business was to blame, it added.

PA Media

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