Ferrexpo appoints acting CEO, Zhevago remains a director

28 October 2019

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.

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