Auditor slams Ferrexpo over £85m scandal
FeRRexPO was thrown into crisis as its former auditor accused it of foot-dragging over a multi-millionpound corruption scandal.
Two directors resigned from the iron ore miner following the release of a report on Friday which said Deloitte had quit because it was unhappy about a review into allegations of possible misuse of funds.
But last night the FTSe 250 firm said Deloitte believed Ferrexpo waited too long to initiate an independent review into millions of pounds it handed to a Ukrainian charity called Blooming Land.
Shares in the Ukrainian iron ore miner plunged 28pc on Friday after Deloitte abruptly stood down as its accountant over the Blooming Land spat, but details of the delayed probe were only made public last night.
Deloitte said it had repeatedly called for Ferrexpo to start a probe from November 2018, but this did not happen until February. The review found some of Blooming Land’s funds could have been misappropriated, but no conclusive evidence of this has yet come to light.
Ferrexpo said it ‘believes it initiated the formal independent review at the appropriate time, given the other steps it was taking and the surrounding circumstances’.
Ferrexpo’s independent committee concluded Blooming Land was not connected to the miner’s chief executive, Ukrainian billionaire Kostyantin Zhevago ( pictured). But this did not chime with Deloitte’s findings, which said it was ‘ unable to conclude’ if Zhevago, 45, had ties to the charity.
Ferrexpo gave Blooming Land about £85m in the past six years. The company says Blooming Land’s activities include diabetes prevention, eyesight care and support for the elderly.
Shortly after Deloitte’s announcement on Friday, nonexecutive directors Mary Reilly and Bert Nacken said they would leave after the company’s annual meeting in June.
But yesterday Ferrexpo said Reilly, head of its audit committee, and Nacken, head of the board’s pay group, have already left. Chairman Steve Lucas said they are now looking for new auditors and replacement non- executives. he added: ‘We are disappointed by Deloitte’s resignation and its reasons, as well as the resignation of Ms Reilly and Mr Nacken. As reported in 2018 full- year results, at this stage we cannot conclude as to the ultimate use of all of the funds by the charity.’ Shares rose 5.1pc, or 9.8p, to 202.4p.