Security Service agents stop production at tire maker Rosava

Agents from the Security Service of Ukraine (SBU) forcibly entered the production facility of Rosava (UX: ROSA UK), part of Finance & Credit Group, in Bila Tserkva in Kyiv region in Ukraine and stopped production yesterday, Interfax reported yesterday, citing the company’s press service. Kommersant reported this morning that in recent days SBU agents have also visited other Finance & Credit Group businesses including Finance & Credit Bank, Arterium Corporation and Stakhaniv Wagon (UX: SVGZ UK). SBU Press Secretary Maryna Ostapenko said the action was taken in connection with criminal investigations into a fictitious business and forgery, but refused to disclose further details. Finance & Credit Group is controlled by Ukrainian businessman Konstantin Zhevago, a member of the Yulia Tymoshenko Bloc in parliament. Brad Wells: Unfortunately, SBU raids are not unheard of in Ukraine and are usually symptomatic of political or business conflicts. In this context, yesterday’s development is a potentially worrying sign for the broader investment environment in Ukraine as it could indicate movement by allies of the ruling government, linked to the Party of Regions (which controls the SBU), to seize physical assets in. We also view potential negative implications for Zhevago’s other flagship asset, LSE-listed Ferrexpo (FSE: FXPO LN), which has been the subject of significant media chatter of late regarding a sell-out.