Scandal-hit mining giant no closer to uncovering wrongdoing

Bosses at scandal-hit mining giant Ferrexpo have said they are no closer to uncovering any wrongdoing at the firm over payments to a Ukrainian charity.

The iron-ore miner, which will update shareholders at its annual general meeting on Friday, said it has also appointed a new chairman of its audit committee and its independent review committee.

Graeme Dacomb, a former partner at accountancy giant EY for 26 years, will join the board next week.

Ferrexpo chairman Steve Lucas said the appointment shows the company’s “commitment to the highest standards of corporate governance”.

He added: “The independent review into how Ferrexpo’s donations to a third-party charity in Ukraine were used remains ongoing.

“The company will make an announcement to shareholders when the independent review committee completes its work.

“To date, after a significant amount of work on the part of our forensic accountants and legal advisers, there has been no conclusive evidence of any wrongdoing.”

In April, the company’s auditor, Deloitte, resigned after the company initially decided against holding an investigation into the scandal, which saw a third-party charity in Ukraine, Blooming Land, receive large sums from Ferrexpo which were allegedly misappropriated.

The chief financial officer also sold shares worth more than £400,000 the day before the mining company revealed that its auditor had resigned.

Deloitte warned Ferrexpo in October and November last year that it expected an independent forensic review into the matter if Blooming Land did not provide requested evidence about the funds.

Bosses initially agreed on an investigation, but then voted in January not to start the inquiry, opting to write to Blooming Land for further clarification.

A review only began after Deloitte threatened to resign a third time in January this year, leading to law firm Herbert Smith Freehills and BDO being appointed to investigate.

Ferrexpo added on Friday that underlying pre-tax profits are expected to increase materially in the first half of the year compared with 2018 due to higher pricing and an increase in sales volumes.