The situation with Ferrexpo shows that pressure on business continues to increase - Kushniruk

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Ferrexpo shares continue to decline

The intention to gain control over Ferrexpo’s assets in Ukraine can motivate the security forces’ actions against the international company.

Economist Borys Kushniruk writes about this in his blog on Censor.net.

"What's happening with Ferrexpo - numerous criminal cases, absurd claims, wild amounts of bail - is not a unique case for Ukraine. Despite all the scandals and promises of the current government, the pressure of the security forces on the remaining businesses in the warring country continues to increase. It was as if there had been no assurances from the top officials of the state, who pretended to understand that Ukraine must rely on its own strength. In particular, in ensuring the stable operation of domestic enterprises that finance the budget and, ultimately, the Armed Forces with taxes," the economic expert says.

In his opinion, the example of Ferrexpo is interesting because the security forces are destroying one of the largest Ukrainian corporations, whose shares are traded on the London Stock Exchange, in order to either establish control over it or force its owners to "share" their profits.

At the same time, Borys Kushniruk notes that Ferrexpo continues to operate in Ukraine, develop its facilities and pay taxes.

"Recently, the company announced the launch of new production facilities worth $80 million and announced its intention to electrify its open pit fleet. Such actions during the war and government pressure indicate that the owners may have more faith in Ukraine than its leaders," the economist says.

Nevertheless, according to the expert, the company's shares have been declining lately, as the stock market reacts to the state's actions against the company.

"The fact that Ferrexpo's share price drop is due to the actions of the security forces, not to the company's internal problems, is Polischinel's secret for Western investors. However, Western governments, unlike the Ukrainian one, take business into account. And when our security forces, in the interests of the government, are "degreasing" not only Zhevaho, but, for example, one of the world's largest investment corporations, BlackRock, and others, it is no wonder why Ukraine has problems getting aid from the United States," the economic expert believes.

He reminds that by persecuting Ferrexpo, the authorities are destroying a business that has invested $3.5 billion in Ukraine, an amount equal to three tranches of the International Monetary Fund. According to Kushniruk, this money would be a significant support for the budget of the country at war.

However, according to him, it is more important for the authorities to gain control over the company's assets than to allow it to operate and replenish the budget.

"They had enough economic liberalism for the first few months of the war, when it was really scary. As soon as the Russians were driven away from Kyiv, nature took its course. The actions against Ferrexpo are virtually identical to all the other similar cases mentioned above. And the goal is the same: either to pay or to hand over the assets. Moreover, Zhevaho himself confirmed that he had been extorted for dropping the criminal prosecution. I wonder if they thought to write a letter with demands BlackRock as well," the expert writes.

According to Borys Kushniruk, the current government is acting in the worst traditions of its predecessors, putting pressure on "decent businesses that attract investments and pay taxes in good faith."

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