Deloitte quits as auditor to miner Ferrexpo

SHARES in Ferrexpo plunged nearly 30pc yesterday after Deloitte abruptly resigned as the miner’s auditor.

In a statement to the stock exchange, the FTSE 250 company said Deloitte had “resigned from its office as statutory auditor with immediate effect”.

The share price slide comes days after Ukraine-based Ferrexpo revealed a disagreement with Deloitte over its chief executive’s possible involvement with a charity, backed by the miner, that is being examined for missing payments.

Deloitte qualified Ferrexpo’s annual accounts earlier this week by saying it could not establish whether co-founder Kostyantin Zhevago “held significant influence or exercised control” over Blooming Land, a charity set up in Ukraine to further Ferrexpo’s corporate social responsibility (CSR) goals.

The miner suspended donations to Blooming Land last year after Deloitte identified “discrepancies” in its bank statements. Ferrexpo set up a committee and hired BDO to examine the charity. The inquiry is ongoing, but Deloitte said this week “some funds could have been misappropriated”. Ferrexpo said its board had reached a “unanimous view” that Mr Zhevago “does not have significant influence or control over Blooming Land”.

Mr Zhevago, who owns half of Ferrexpo, has been an MP in Ukraine for 20 years. Deloitte’s report raised questions about the relationship between Blooming Land and Khimreaktiv, another entity controlled by Mr Zhevago, which had advanced funds to the charity.

Ferrexpo has paid $110m to Blooming Land since it was founded in 2013 to support healthcare initiatives such as eye tests. Ferrexpo, an iron miner, reported a 13pc slide in profits for 2018 this week on the back of rising costs. Deloitte declined to comment.

Its shares closed down 76.3p, or 28pc, at 192.6p.