Cases against Ferrexpo look like an attempt to seize an operating business - Kravets

Unconvincing grounds for criminal cases, huge bail amounts for top executives and the seizure of assets of the international Ferrexpo group no longer look like a legal dispute and start to look like an attempt to take away an operating business.

Rostyslav Kravets, lawyer and head of the Ukrainian Independent Foundation of Lawyers, writes about this in his blog on Censor.net.

The lawyer notes that the Deposit Guarantee Fund has claims against Zhevaho regarding the bankruptcy of his bank Finance and Credit, which the Fund has formalized in a lawsuit. However, when the defense is not allowed to familiarize itself with the case file for a year, and when the assets of Ferrexpo, in which Zhevaho owns less than 50%, are seized as part of the lawsuit, it stops looking like a legal dispute and starts looking like an attempt to take away an operating business.

In his opinion, the criminal cases against Kostiantyn Zhevaho were initiated on absurd pretexts, such as "underreporting" of rent payments for "illegal mining". In the first case, examinations recognized the company's case, and in the second case, it was found that the issue was gravel screening, a by-product of ore mining.

The lawyer reminds that in these cases, top managers of enterprises were arrested, and the prosecutor's office demands bail amounts that far exceed the amount of damage caused and contradict criminal proceedings. For example, the accountant of Poltava Mining, a Ferrexpo group company, was granted UAH 2 billion in bail, and the board chairman was granted UAH 800 million.

Kostiantyn Zhevaho himself is in France, but the country's Supreme Court refused to extradite him to Ukraine.

"The court notes in its refusal that Ukraine violates the Convention for the Protection of Human Rights and Fundamental Freedoms and that Zhevaho cannot expect fair justice," writes Rostyslav Kravets.

The lawyer also emphasizes that the Ferrexpo group of companies is allegedly being attacked by another company at the same time. An unknown company has bought disputed debts of Poltava Mining from the Deposit Guarantee Fund and is demanding UAH 4.7 billion from the company in a lawsuit. According to Rostyslav Kravets, this looks like a well-thought-out scenario, and any Ukrainian entrepreneur understands its major purpose.

"I doubt whether all this will work in Ferrexpo’s case. In fact, nothing new is happening. History repeats until the error is corrected. I would like to remind you that for a long time, a Russian group of offshore companies, which the media associate with VS Energy of the former Deputy Speaker of the State Duma of the Russian Federation Oleksandr Babakov, has been trying to seize shares in Poltava Mining," says the lawyer.

According to Kravets, the initiators of the previous attack on Ferrexpo were defeated, and those who are now repeating this scenario can harm not only Zhevaho himself, who is only one of the company's shareholders, but also Ferrexpo's international investors and the state.

"Ferrexpo is one of the world's leading steel businesses. An attack on the company is an attack on the world's leading investors who own shares in this business. It is probably not necessary to explain the reputational and investment implications of this step for the country. In general, if you look at this high-profile case from this angle, you will have even more questions about everything that is happening around the company," concludes Rostyslav Kravets.