Iron ore price rises on firmer steel outlook, but trade tensions cap gains
Lower Chinese steel product inventory driven by robust exports also supported iron ore prices above $100/t.
Ferrexpo Plc shares tumbled to a one-year low after authorities said they suspect the company’s billionaire chief Kostyantin Zhevago of large-scale money laundering and embezzling funds from a bank he formerly owned.
Detectives from Ukraine’s State Bureau of Investigations handed a so-called notice of suspicion to Zhevago’s lawyer after the executive failed to appear for questioning in Kyiv on Friday, the bureau’s First Deputy Chief Olha Varchenko said on Facebook. Neither Zhevago nor his lawyer immediately responded to calls and text messages from Bloomberg News seeking comment.
Shares of Ferrexpo, which mines for iron ore in central Ukraine, sank as much as 6.7% in London trading. The stock is down 40% since the start of July.
“There are some risks to Ferrexpo, especially if their corporate governance appears not to be strong and independent,” said Dmytro Khoroshun, an analyst at Kyiv-based investment firm Concorde Capital Ltd. “The more they keep silent, the more worrying it is.”
Zhevago is the former owner of Ukrainian lender Finance & Credit JSC, which was declared insolvent by the central bank in 2015. An investigation has established that 2.5 billion hryvnia ($104 million) was siphoned off from bank and transferred to foreign companies owned by Zhevago, according to the bureau. Last month, two executives from Finance & Credit were indicted.
Separately, Ukraine is also investigating whether a charity linked to Ferrexpo, called Blooming Land, was used to launder money and evade taxes. Last month, Ferrexpo said a review found that none of its own directors, management or employees were involved in any misappropriation of funds.
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