Ferrexpo’s Corruption Stain Deepens as Auditor Standoff Pushes Miner to the Edge
22.06.2026 - 17:07:09 | boerse-global.de
Ukrainian authorities have widened their bribery investigation into Ferrexpo’s majority owner Kostyantyn Zhevago, adding a new layer of uncertainty to a company already running on fumes. The probe now targets alleged corruption of the Ukrainian Supreme Court and reaches back to 2023, when the former chief justice was involved. Zhevago, who holds just under 50% of Ferrexpo through Fevamotinico Sarl, has been under multiple criminal investigations in Ukraine for years. The timing is brutal: the miner’s annual shareholder meeting in London later this month will lack audited accounts, and its cash pile has shrunk to a wafer-thin $22 million.
The AGM, scheduled for June, will be a stripped-down affair. With no approved 2025 financial statements – auditors have refused to sign off, citing “significant doubts” that Ferrexpo can continue as a going concern – shareholders can only vote on routine items: the re-election of directors and a share buyback authorization. Long-serving board member Vitalii Lisovenko will step down after more than nine years. The key resolutions, including the approval of the annual report, reappointment of auditors, and the remuneration report, have been postponed to a separate meeting once the accounts are finally cleared. Ferrexpo’s shares have been suspended from trading on the London Stock Exchange since early May, frozen at €0.32.
Behind the governance vacuum, the operational picture is dire. Production at its Ukrainian pellet plants collapsed 72% in the first quarter, to just 593,000 tonnes. Damaged energy infrastructure means only one of four pelletizing lines is running. That has drained the balance sheet: free cash at end-Q1 stood at an estimated $22 million, and management calculates a minimum $100 million funding requirement over the next 18 months. A recent $7.7 million injection from the sale of the bulk carrier Iron Destiny buys a few more weeks of runway, but auditors warn that liquidity may last only into late summer without a capital injection.
Should investors sell immediately? Or is it worth buying Ferrexpo?
Two separate legal battles in Ukraine are compounding the cash crunch. Ferrexpo’s main operating unit, Ferrexpo Poltava Mining, is fighting an insolvency case triggered by a disputed guarantee claim worth $113 million; an appeal is under way against an initial court ruling. Separately, the Ukrainian state is withholding around $90 million in value-added tax refunds, which the company blames on sanctions tied to its main shareholder. The combined effect has locked up the very funds needed to exit the going-concern hole.
The company sees only one escape route: a $100 million equity raise that requires both audited financial statements and a restored trading line. Yet the auditors will not sign off until the funding is in place, and the funding cannot close without the audit. This chicken-and-egg standoff must be broken by late summer, or what remains of Ferrexpo’s operations may be forced to idle completely. In a faint sign of outside interest, the stock was recently added to a London ETF focused on Ukraine’s reconstruction, but the index inclusion does nothing to solve the immediate existential threat swirling around Zhevago’s probe, the frozen shares, and the vanishing cash.
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