October 28, 2019 / 12:14 PM / 21 days ago

Ferrexpo CEO Zhevago stands down temporarily to resolve issues at another business

(Reuters) - Ferrexpo (FXPO.L) Chief Executive Kostyantin Zhevago is temporarily stepping down to resolve matters related to one of his former businesses in Ukraine, the London-listed iron pellet producer said on Monday.

The Ukraine-focused company said Zhevago would hand over the reins to finance chief Chris Mawe to focus on issues relating to one of the businesses he owned until 2015.

Ferrexpo did not elaborate and declined further comment, but a person familiar with the matter told Reuters the business in question was Finance & Credit Bank (F&C), which Zhevago owned until it went bankrupt in 2015.

“This temporary change of leadership is necessary and in the interests of all shareholders to enable Mr Zhevago to focus on on-going matters in Ukraine without impacting the company’s operations,” Chairman Steve Lucas said in a statement, adding that Zhevago continued to be backed by the board.

The first deputy head of Ukraine’s state investigation bureau, Olha Varchenko, said in a Facebook post last month that Zhevago had been called for questioning as a suspect for financial violations at F&C.

However, Switzerland-based Ferrexpo said earlier this month Zhevago had not been served with any legal notices and he denied any wrongdoing.

Reuters was unable to reach Zhevago for comment.

The Ukrainian mogul, 45, owns a stake of more than 50% in Ferrexpo and was appointed CEO in 2008. He was also a member of the Ukrainian parliament between 1998 and 2019.

He will remain on the board as a non-independent, non-executive director, the company said. Mawe, who takes over as acting CEO immediately, has been with the world’s third-largest pellet exporter for 11 years.

The move comes just two months after Ferrexpo said funds it had donated to an Ukrainian charity, which coordinated Ferrexpo’s corporate social responsibility programme, may have been misappropriated.

Discrepancies at the Blooming Land charity and an internal review that ensued forced Ferrexpo to delay its annual results and hammered its shares.

The shares, which have lost nearly a third of their value this year, were down 2% at 1050 GMT on Monday.

Reporting by Yadarisa Shabong and Pushkala Aripaka in Bengaluru; Additional reporting by Pavel Polityuk in Kiev; Editing by Tomasz Janowski and David Holmes

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