Court delays Ferrexpo’s legal battles Ferguson takes hot seat as Murdoch quits BSKYB
IRON ore miner Ferrexpo could be forced to give up almost half of its flagship mine after a long-running legal battle was put on hold by a British judge.
The case has pitted Ukraine’s youngest billionaire against the deputy speaker of Russia’s parliament.
In 2002 Ferrexpo founder and chief executive Kostyantin Zhevago, worth an estimated £1.1bn, paid $30m (£18.6m) for a 40.2pc stake in the Poltava mine from companies owned by Russian politician Alexander Babakov
But it is claimed Ferrexpo didn’t follow the proper process when trying to buy the stake, which took its holding to almost 98pc in the mine.
Last year Poltava produced around 30m tonnes of iron ore pellets. The Supreme Commercial Court of Ukraine is considering the case. Ferrexpo tried to get the case heard in the UK instead.
But yesterday Justice Andrew Smith, at a Commercial Court hearing in Leeds Crown Court, put the case on hold until Ukrainian authorities have concluded their case. He said the UK hearings ‘have no purpose other than pointlessly to duplicate’ the Ukrainian ones.
If he eventually rules the Ukrainian courts hold sway, Ferrexpo may be forced to hand back the 40.2pc stake in the mine. Ferrexpo (down 5.8p at 299.5p) refused to comment. NICK Ferguson took up the chairmanship of BSKYB yesterday after investor pressure finally forced James Murdoch to jump before being pushed.
The scion of Rupert Murdoch’s media dynasty announced his resignation, saying his presence had become a ‘lightning rod’ for the company.
He will be replaced by Ferguson under a contingency plan drawn up in anticipation of his departure and revealed in the Daily Mail last month.
But Ferguson’s first task will be to respond to dismay that Murdoch will remain in the boardroom as a non-executive director.
A report by the Culture Select Committee, due out this month, is expected to criticise Murdoch heavily.
Alan Mcdougall, managing director of shareholder advisory group Pirc, said yesterday’s decision was ‘inevitable’ but did not go far enough.
He said: ‘We believe it would be best for the company and its shareholders if he left the board entirely, and would find it hard to support his re-election at a future meeting.’
He added that the company had sustained ‘self-inflicted reputational damage’ by failing to appoint an independent chairman as soon as News International was engulfed by scandal.
But sources close to BSKYB (down 4.5p to 675.5p) said the company had lost a phenomenally successful helmsman.
It was Murdoch who set a target of winning 10m subscribers when the company had 7m, a goal the broadcaster reached last year.
He instigated £2bn of investment in telephone and broadband services, which helped profits to rise fourfold in his eight-year tenure.
He also presided over BSKYB winning the rights to major sporting events such as Formula 1 and the Ashes, and launching Sky Atlantic and Sky Arts channels.
The firm’s latest set of financial results are a study of a business in rude financial health.
Pre-tax profit rose 14pc in the first half to £772m, while BSKYB has returned £3.6bn to shareholders in eight years, more than the stock market value of ITV.
Ferguson said: ‘ The board’s support for James and belief in his integrity remain strong,’ adding he would make a ‘continued contribution’ as a non-executive. WHITBREAD’S Chris Rogers could complete his transition from accountant to coffee king if Costa, now under his control, splits off from its parent company. The move shows the regard in which he is held.
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