Ferrexpo auditor Deloitte quits as queries remain around charity funds
BENGALURU – Ferrexpo said on Friday Deloitte had resigned as its auditor with immediate effect, days after the iron-ore miner said some funds of a charity it donates to in the Ukraine could have been "misappropriated".
Blooming Land, the charity which coordinates Ferrexpo's Corporate Social Responsibility (CSR) programme, came under scrutiny after auditors found holes in the charity's statements that showed how it uses the funds its receives.
Swiss-headquartered Ferrexpo did not provide a reason for Deloitte's resignation. Deloitte did not immediately respond to a request for comment.
Ferrexpo shares were down 7.7% to 248.7 pence in early trade.
Ferrexpo, whose major mines are located in the Ukraine, had said that 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.
Funding for Blooming Land's CSR activities is provided solely by one of the company's units in the Ukraine and Khimreaktiv, an entity ultimately controlled by Ukrainian mogul and Ferrexpo's CEO and owner Kostyantin Zhevago.
Ferrexpo had said that its auditors were unable to conclude how much control or influence its chief executive officer has over the charity.
In a qualified opinion - or statement addressing an incomplete audit - Deloitte said it had been unable to conclude whether $33.5-million of CSR donations advanced to Blooming Land between 2017 and 2018 was expended by the charity on "legitimate business payments for charitable purposes".
Total CSR payments made to Blooming Land by Ferrexpo since 2013 total about $110-million, Deloitte had said.
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