Ferrexpo PLC (FXPO.L), a Swiss iron ore company with assets in Ukraine, on Tuesday issued an update on proceedings against its Ukrainian subsidiary Ferrexpo Poltava Mining or FPM.
The company now said it has decided to make a partial payment of the bail approved by the Kyiv Court of Appeal on April 29 for Viktor Lotous, the General Director and Chair of the FPM Management Board, in connection with royalty related investigation. Ferrexpo now said it will pay UAH 50 million or approximately $1.3 million in the bail amount.
Under Ukrainian law, there is no legal obligation to pay the remainder of the bail amount.
It was on October 31, 2023 that Lotous, a senior manager of FPM, received a notice of suspicion regarding accusations for the potential underpayment of iron ore royalties.
On November 13, 2023, a court of first instance approved a bail for Lotous for around UAH 800 million or around $20 million. Following an appeal, the Kyiv Court of Appeal, on April 29, approved a bail of UAH 650 million or around $16.5 million.
The company said the court did not provide any rationale for the high bail amount, nor its alignment with the financial standing of the suspect. The bail is separate to the previous bail amounts which were disclosed in the company's announcement made on November 2, 2023, relating to a different investigation concerning the sale of waste products.
Ferrexpo said its operations are unaffected, and that further announcements will be made as appropriate.
The company recently reported a significant increase in production and sales volumes for the first quarter, the highest since the full-scale invasion of Ukraine commenced in February 2022.
Ongoing production at the Ukrainian operations continues to perform according to plan and without disruption in April.
Regarding LLC PCC Kysen, the company said a rescheduled preparatory hearing on April 29 at the Commercial Court in Poltava Oblast to consider the application from Kysen was postponed. A preparatory hearing is now rescheduled for June 4.
In London, Ferrexpo shares were trading at 51.80 pence, up 2.98 percent.
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