Vitalii Kulyk: Pressure on Ferrexpo proves that Ukraine has not become investor-friendly

Vitaliy Kulyk, political scientist and director of the Center for Civil Society Studies, wrote about this in his blog on Censor.net.

Referring to the company's annual report on the London Stock Exchange, the expert announced the amount of its net loss in 2023 — $84.75 million. In contrast, in 2022, Ferrexpo showed a profit of $220 million.

The reason for these losses, according to the political scientist, is the company's need to defend itself in court against the Ukrainian authorities.

"The $85 million loss was mainly due to provisions for ongoing litigation and disputes in Ukraine totaling $131 million as of December 31, 2023. Excluding the impact of these provisions, the result for FY2023 would have been a profit of $46 million," writes Kulyk.

According to the political scientist, this is evidence that there are massive manifestations of government pressure on business in Ukraine, resulting in business making losses and being forced to lay down profits to repel attacks. 

According to him, after the scandal with the detention of investment banker Ihor Mazepa, the steps initiated by the authorities to improve the business environment did not lead to the desired results. Businesses in Ukraine still have to survive and overcome not only economic challenges but also administrative ones.

Vitalii Kulyk emphasizes that a strong national business is one of the conditions for the victory and preservation of the country, as it ensures stable operation of national enterprises that pay taxes. However, the government continues to attack not only Ukrainian companies, such as KyivGuma and Balistyka, but also those with international capital, such as Synevo and Ferrexpo.

"While the first case looks like banal 'milking', the second case reveals signs of attempts to convey a 'personal greeting' to one of Ferrexpo's shareholders, Kostiantyn Zhevaho. He explicitly stated that he had been extorted by one of the "effective managers" from Bankova Street. In addition, Zhevaho's family owns the opposition channel Espresso, which tells a completely different story than the United Telethon, recently mentioned by the US State Department," the political analyst notes.

Kulyk suggested that the authorities' intentions with regard to Kostiantyn Zhevaho go beyond "restoring justice." This is evidenced by the fact that the case of his former bank, Finance and Credit, has been going on for more than 4 years, and the businessman's defense team is not allowed to review the case file.

Another proof of the bias of Ukrainian law enforcement against Zhevaho is that the French Supreme Court refused to extradite him to Ukraine. After that, the authorities switched to arresting Ferrexpo and its executives.

"Its top managers are being detained with cosmic amounts of bail. At the same time, unknown entities are becoming more active, coming to Ferrexpo with debt claims dating back 10 years. It is purely a scheme of squeezing money and seizing," writes the political scientist.

He reminds that Ferrexpo is one of the largest investors in Ukraine today that contributed more than $100 million to the Ukrainian economy in 2023.

"If such a business is being suppressed, what can a smaller business hope for, one that cannot reserve millions for a legal fight and that has no international support?" asks the political scientist.

According to Vitalii Kulyk, the best thing the government can do is to leave Ferrexpo and other bona fide businesses that continue to operate, pay taxes and provide a reliable rear in Ukraine.