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Ukrainian billionaire arrested at Courchevel ski resort

Kostyantin Zhevago, billionaire and chief executive officer of Ferrexpo Plc, walks to his vehicle after a campaign event at the Palace of Culture in Horishni Plavni, Ukraine, on Thursday, July 11, 2019 - Evgeniy Maloletka/Bloomberg
Kostyantin Zhevago, billionaire and chief executive officer of Ferrexpo Plc, walks to his vehicle after a campaign event at the Palace of Culture in Horishni Plavni, Ukraine, on Thursday, July 11, 2019 - Evgeniy Maloletka/Bloomberg

The billionaire majority owner of London-listed iron ore pellet producer Ferrexpo has been arrested at a ski resort over $100m [£83m] embezzlement allegations in Ukraine.

Kostyantin Zhevago, a former Ukrainian MP, was detained by French police at Courchevel in the Alps on Tuesday on an international arrest warrant issued at the behest of his home country.

He is suspected of embezzlement and money laundering linked to the disappearance of $113m (£94m) from the now bankrupt Ukrainian lender Finance & Credit Bank.

Mr Zhevago owns 50.3pc of Ferrexpo, which is listed on London's FTSE 250 index.

He stepped down as chief executive “temporarily” in October 2019 to focus on resolving matters around the bank, and has not resumed the position.

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He had stayed on as a non-executive director on its board. However, on Thursday afternoon the company announced he was prepared to leave the board immediately.

The statement added: "The Board is taking steps to document his resignation formally and will update the market as appropriate."

The company said in September 2019 that Mr Zhevago strongly denies any allegations of wrongdoing.

Ferrexpo confirmed that Mr Zhevago, 48, had been detained in a statement to the stock exchange on Thursday morning.

It added: “The company understands that this is in relation to matters unrelated to Ferrexpo.

“The board of directors of Ferrexpo is seeking to clarify the situation and will update the market as appropriate.”

Ferrexpo, whose current chief executive is Jim North, has struggled with power outages at its pellet plant owing to Russian missile attacks on Ukrainian infrastructure.

Ukraine is seeking Mr Zhevago’s extradition. As well as his arrest, Ukraine’s state Bureau of Investigation said several of his properties and other assets had also been seized.

This is understood not to include his shares in Ferrexpo, which are held via Luxembourg-based company Fevamotinico.

Shares in Ferrexpo fell 3.28pc on Thursday to 158.10p, valuing the company at £930m, and Mr Zhevago’s stake at £467m. Forbes currently lists his net worth as $1.3bn.

The businessman was named in Forbes in 2008 as Europe’s youngest self-made billionaire. He and partners bought Ferrexpo’s largest mine, in Poltava, in the mid-nineties.

According to a profile in the Evening Standard in 2012, he grew up in Zaporizhzhia, near the Black Sea, before graduating from Kiev National Economic University. He was an opposition MP in Ukraine’s parliament until 2019.

Court records indicate that in 2018 he was close to buying property in Grosvenor Square, London, although the deal did not go through.