Ferrexpo appoints acting CEO, Zhevago remains a director

Ukraine’s largest iron ore pellet exporter Ferrexpo
(FXPO LN) has appointed as its acting chief executive officer Chris Mawe, who
has been with the company for 11 years and whose previous role was chief
financial officer, the company said in an Oct. 28 release.

Kostyantyn Zhevago, the majority owner and the
previous CEO, will remain on Ferrexpo’s board as a non-independent,
non-executive director, Ferrexpo said.

The CEO change was initiated by Zhevago, who wants to
step aside, temporarily, from the CEO position to focus on resolving certain
matters in Ukraine relating to one of the businesses he owned until 2015, the
release noted.

Ferrexpo’s non-executive chairman, Steve Lucas, said
in the release that the company’s board, including Zhevago, believes his
temporary change of leadership is necessary and in the interests of all
shareholders.

Dmytro Khoroshun: We commend
Zhevago and Ferrexpo’s board for this change that clearly shows their resolve to
minimize the risks to all shareholders and to optimize the allocation of their
resources.

At the same time, we think that Zhevago will continue
to remain interested in Ferrexpo’s matters and to support the company as a
director and the majority owner.

The business that Zhevago owned, which requires his
focus now according to the release, is the Finance & Credit (F&C) bank,
we believe. Reportedly, Zhevago has been chosen among several easy targets for an expedient prosecution
to benefit politically the new government in Ukraine. It would be a ridiculous
case of selective prosecution if Zhevago is the only former owner of a failed
bank to be prosecuted, in our opinion. Nevertheless, it will take a substantial
effort on Zhevago’s part to resolve this affair.

Now that Zhevago is able to fully focus on F&C
bank matters, we think that both he and Ferrexpo have fighting chances of
overcoming this issue without long-term damage to Ferrexpo’s value to all
shareholders.