Iron ore pellet producer Ferrexpo Plc on Tuesday said some funds of a charity in Ukraine it donates to could have been “misappropriated” as indicated by findings of an ongoing independent investigation.
The Ukraine-focussed company said although the Independent Review Committee’s investigation – launched in February – into Blooming Land’s use of Ferrexpo’s funds was continuing, new evidence pointed to potential discrepancies.
The charity, which coordinates Ferrexpo’s Corporate Social Responsibility (CSR) programme, came under the scanner in 2018 after auditors found holes in the charity’s statements that showed how it uses the funds its receives. Blooming Land did not immediately respond to a request for comment.
Ferrexpo said although auditors were unable to conclude how much control or influence its chief executive officer has over the charity, its board unanimously agreed that the top boss did not have significant influence or control.
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.
Ferrexpo, which had delayed its full-year results twice as it awaited further progress of the review, reported a 13 percent drop in annual pretax profit on Tuesday. Revenue, however, rose 6.4 percent.