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Court seizes Zhevaho's assets to secure UAH 46 bln claim of Deposit Guarantee Fund, including Ferrexpo's Poltava Mining

(News item issued on March 7 has been updated, extended)

KYIV. March 8 (Interfax-Ukraine) – The Kyiv Economic Court at the request of the Deposit Guarantee Fund has seized the assets of owner of JSC Finance and Credit Bank Kostiantyn Zhevaho to secure a claim to recover UAH 46 billion damages caused to the bank and its creditors.

According to the fund’s press release, the Kyiv Economic Court made the decision following the application of the fund seeking to secure the claim. It concerns 50.3% of the charter capital of three enterprises: Poltava Mining, Yerisovo Mining LLC and Bilanovo Mining LLC, which indirectly belong to Zhevaho through Ferrexpo.

At the same time, when making this decision, the court took into account the confirmation provided by the fund that the defendant for a long time tried in various ways to hide the fact of ownership of property belonging to him, using which the claims of the fund against Zhevaho could be satisfied in the future.

In addition, the court prohibited other companies associated with it from alienating these assets.

“This decision is another step to protect the interests of the creditors of Finance and Credit Bank,” Viktor Novikov, the deputy managing director of the fund, said.

According to him, now, the fund’s claim against the owner of the bank is in the trial court of Ukrainian jurisdiction, and it is extremely important that during the consideration of this case, the assets are preserved in full and can subsequently be used to compensate for the damage caused to the bank’s creditors.

“The fact that the High Court of England and Wales when considering the lawsuit of the fund against the owner of the bank came to the conclusion that there was enough reason for the universal seizure of Zhevaho’s assets was of great importance,” Novikov said.

Ferrexpo in its exchange report late on Tuesday said that the Company can confirm that it has no intention, and never has had any intention, of transferring the shares referenced above.

“In any event, the Company has previously successfully appealed a similar share arrest (freeze) action applied to the shares held by Ferrexpo AG in Ferrexpo Poltava Mining. Further details on the previous share arrest can be found in the Company’s press releases dated 31 January 2020, 6 October 2020 and 30 November 2020, and associated disclosures in the Company’s full year and interim financial accounts,” the company said in the report.

The SPF said that it filed a lawsuit with the Kyiv Economic Court against Zhevaho seeking to recover UAH 46 billion in losses of the bank and its creditors on January 4, 2023. These losses were inflicted on the bank by systematic lending to the borrowers related to Zhevaho and transferring funds belonging to him by nonresident companies without proper security, which has signs of fictitious, the Fund claimed. On March 1, 2023, the Fund filed an application seeking to secure the claim, which the court satisfied.

The next session of the Kyiv Economic Court in this case is scheduled for March 13, 2023.