Nationalization of Poltava Mining: Ferrexpo warns Ukraine of legal consequences
19 March 15:28
Mining company Ferrexpo plc has warned of possible claims against Ukraine over the transfer of a 49.5% stake in Poltava Mining and Processing Plant (PGOK) to the National Agency for Finding, Tracing and Management of Assets (ARMA), which the company considers a violation of international agreements. This is reported in a press release of the company, "Komersant Ukrainian" informs
Ferrexpo claims that it has not received any official documents or requests regarding the court’s decision to transfer part of the corporate rights of 16 companies, including a 49.5% stake in Poltava Mining, to ARMA, as well as the SBI’s plans to nationalize the assets.
“Ferrexpo believes that the SBI’s statement and the court decision regarding its subsidiary are part of coordinated actions by the Ukrainian authorities against Konstantin Zhevago in connection with the Finance and Credit bank, which he owned, but which has never been part of the Ferrexpo group,” the statement said.
The company considers such actions to be planned pressure on the business: more than 10 court cases have been opened against the company, its shares and accounts have been blocked, railcars have been seized, and top management had to post $16 million in bail, the press release said.
These decisions contradict Ukrainian law and international agreements, and the trial itself contains serious violations, the company says.
“Ferrexpo Plc and Ferrexpo AG had no choice but to send the Ukrainian government an official written notice of possible claims under the UK-Ukraine BIT and Swiss-Ukraine BIT regarding these violations, demanding that Ukraine take measures to stop these illegal actions and start negotiations,” Ferrexpo said in a statement.
The company demands that Ukraine reverse the decision and announces its readiness for negotiations.
Ferrexpo called on the Ukrainian government and the Ukrainian judicial system to take “urgent and effective measures to prevent any attempts to transfer or expropriate corporate rights or any assets of the Ferrexpo group”.
“Ferrexpo believes that Ukraine’s actions are a violation of Ukraine’s obligations under the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Ukraine on the Promotion and Reciprocal Protection of Investments (UK-Ukraine BIT), as well as the Agreement between the Swiss Confederation and Ukraine on the Promotion and Reciprocal Protection of Investments (Swiss-Ukraine BIT),” the company said.
Ferrexpo is a Swiss company with major assets in Ukraine. It owns 100% of Poltava and Yeristovo GOKs, as well as 99.9% of Bilanivsky GOK. The press release emphasized that Ferrexpo’s subsidiaries are not affiliated with Konstantin Zhevago, who is subject to sanctions and ongoing criminal proceedings in Ukraine.
“Poltava Mining and its officials have long been on the radar of law enforcement
on September 20, 2024, SBI investigators sent an indictment to the Kyiv District Court of Kharkiv against seven officials and employees of the plant. According to the investigation, the management of the company, which belongs to a fugitive oligarch, misappropriated more than UAH 370 million. As part of the pre-trial investigation, this and other property and corporate rights of the company were seized.
on January 15 this year, it was reported that prosecutors of the Specialized Environmental Prosecutor’s Office had sent an indictment to the court against four officials of the Poltava Mining and Processing Plant. The investigation established that the chairman of the board, having entered into a criminal conspiracy with other unidentified officials of the plant, set up a scheme for illegal mining for the purpose of enrichment. The amount of environmental damage is over UAH 157 billion. Kommersant Ukrayinsky covered this story.
Konstantin Zhevago himself was notified of suspicion in 2019, when he was accused of possible involvement in the embezzlement of UAH 2.5 billion from the Finance and Credit bank and put on the international wanted list. At the end of December 2022, Zhevago was detained in France, but Ukraine failed to extradite him.
Konstantin Zhevago is under sanctions in Ukraine
A week ago, President of Ukraine Volodymyr Zelenskyy signed a decree on National Security and Defense Council sanctions against former President of Ukraine, MP Petro Poroshenko, oligarch Ihor Kolomoisky, his business partner Hennadiy Boholyubov, pro-Russian politician, former MP, who is now in Russia, Viktor Medvedchuk, and businessman wanted in the case of Finance and Credit Bank Konstantin Zhevago. The sanctions include asset freezes, restrictions on trade operations, a ban on participation in privatization, and many other restrictions and prohibitions. Kommersant Ukrainian also reported on this.
