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Court seeks to seize billionaire Zhevago's Ferrexpo shares
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Move linked to compensation claims over bankrupt bank
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Zhevago denies wrongdoing in comments to Reuters
(Adds Ferrexpo comment)
By Olena Harmash and Olivier Hirt
KYIV, March 7 (Reuters) - A Ukrainian court has ordered
the seizure of shares owned by billionaire Kostyantyn Zhevago in
iron pellet producer Ferrexpo following compensation
claims over his now bankrupt bank, Ukraine's Deposit Guarantee
Fund said on Tuesday.
Zhevago is under investigation in Ukraine on suspicion of
embezzlement and money laundering linked to the disappearance of
$113 million from lender Finance & Credit Bank (F&C), which was
declared bankrupt in 2015. Zhevago told Reuters he denied
wrongdoing and that his prosecution was political.
The Fund said in a statement it was seeking to recover
nearly 46 billion hryvnias ($1.25 billion) in damages.
"This decision is another step to protect the interests of
the creditors of the Finance&Credit bank," said Viktor Novikov,
deputy managing director of the Fund.
The Kyiv commercial court ordered the seizure of 50.3%
stakes in the Poltava, Eristivskiy and Bilanivskiy mining plants
that belonged to Zhevago via Ferrexpo, the statement said. The
facilities are located in the Poltava region of central Ukraine.
"The company can confirm that it has no intention, and never
has had any intention, of transferring the shares referenced
above," Ferrexpo said in a statement.
It said that Ferrexpo’s operations remained unaffected and
controlled by Ferrexpo plc.
Zhevago said he had done nothing wrong.
"My entrepreneurial activities as well as the investments I have made are beyond any doubt," Zhevago told Reuters in an online interview from Paris last week.
"It is no coincidence that the investigations against me became public immediately after I lost my seat as a member of parliament," he said in his first public comments to international media since his arrest in France in December.
President Vladimir Zelenskiy has announced a drive to clean up the economy, increase transparency and reduce corruption as part of moves to ensure Ukraine continues to receive Western aid to defend itself against Russia.
Since Ukraine's independence in 1991, a small group of
businessmen with interests across multiple sectors have
dominated the political system and economy. Zelenskiy wants to
reduce the influence of these so-called oligarchs.
Zhevago, 49, served in Ukraine's parliament from 1998 to
2019. He was arrested on an international warrant issued by
Ukraine and released by a French court in December on bail of 1
million euros ($1.1 million). He is expected to return to a
French court for an extradition hearing next week.
'NOT AN OLIGARCH'
Zhevago said the term oligarch did not apply to him, but
that a campaign against prominent business leaders was being
waged for political reasons.
"This populism is finding fertile ground among the war-torn
Ukrainian population. Unfortunately, the Ukrainian government is
not acting in the best interests of its citizens: its aim is
rather to silence unwelcome critics of the political system..."
Ferrexpo, which produces high grade iron ore pellets, is
being investigated in Ukraine over potential underpayment of
iron ore royalty payments between 2018 and 2021. Ferrexpo has
denied all allegations.
Zhevago said F&C bank ran into difficulties following
Russia's annexation of the Crimea peninsula from Ukraine in
2014.
"More than 90 (Ukrainian) banks and the bank F&C in
particular - lost huge amounts of money, assets, loans,
collateral, they lost billions in property and in their credit
books because Russia fought and occupied large parts of
Ukraine," he said.
Zhevago said he was committed to participating in a trial to
close matters with F&C bank, including by video-link.
"If an independent Ukrainian court concludes that I have to pay a fine, I will. But I will never plead guilty to escape a possible fine. At the end of the day, my actions speak for themselves: I have demonstrably invested over $500 million in Ukraine over the past five years." ($1 = 36.9100 hryvnias) ($1 = 0.9382 euros) (Olivier Hirt reported from Zurich, Additional reporting by Juliette Jabhiro, Editing by Timothy Heritage and Mark Potter)
