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Ferrexpo finds more discrepancies in donations review

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(Reuters) – Iron ore pellet producer Ferrexpo said on Tuesday an ongoing review of its donations to a charity identified additional discrepancies, forcing it to delay the release of its full-year results for 2018.

The company’s shares fell 4 percent in early trading on the news. The company said the discrepancies relate to the use of the donations by the charity, Blooming Land, and its sub-funds in Ukraine, suggesting the funds may not all have been used for their purpose.

Ferrexpo, which has major assets in Ukraine, did not give details on the nature of the discrepancies that were identified.

The company had established an independent review committee last month to look into donations to Blooming Land, which was set up independently, mainly to coordinate Ferrexpo’s corporate social responsibility (CSR) programme.

Ferrexpo had then said the bank statements of the charity contained “unexplained discrepancies,” and reiterated that Blooming Land and its sub-funds were separately managed and not controlled by the group.

Funding for Blooming Land’s CSR activities is provided solely by one of the company’s units in Ukraine and Khimreaktiv LLC, an entity ultimately controlled by Ukrainian mogul and Ferrexpo’s Chief Executive Officer and owner Kostyantin Zhevago.

The company said it would now announce its full-year results on or before April 3.

Shares of Ferrexpo were down 3.7 percent at 260.3 pence in early trading, making the stock the second-biggest loser on the UK midcap index.

(This story corrects to remove reference to charity being set up by Ferrexpo in lede; clarifies in paragraph 4 charity was set up independently, mainly to coordinate co’s CSR programme)

(Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by Saumyadeb Chakrabarty)

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