Prosecutor General’s Office files third motion to seize more than 2,000 semi-railcars of Poltava Mining

The Prosecutor General’s Office (PGO) has filed a third motion to seize and ban the use, alienation and disposal of more than 2,000 semi-railcars of Poltava Mining, a subsidiary of Ferrexpo Group listed on the London Stock Exchange.

This was reported by the company’s press service. It is noted that these railcars are used to deliver products from the enterprise to ports and the western borders of Ukraine.

As noted, in October 2023, the Kyiv Court of Appeal, on the initiative of prosecutors of the Prosecutor General’s Office and investigators of the State Bureau of Investigation (SBI), decided to arrest 2382 semi-railcars of the Mining, prohibiting their use, alienation and disposal. The reasons were the preservation of material evidence for the duration of the investigation and subsequent special confiscation in the criminal proceedings on the alleged illegal sale of non-fractional screenings in 2019-2021.

In April 2024, the Pechersk District Court of Kyiv lifted the ban on the use of railcars, finding it unjustified, but upheld the ban on their alienation. During the ban, Poltava Mining suffered losses of UAH 103.3 million.

In May, the PGO prosecutor filed a second motion, similar to the first, to ban the use of the plant’s semi-railcars. In fact, he asked to re-seize the property for the same purpose and on the same grounds as before – no other grounds for establishing a further ban on the use of semi-railcars were specified in the motion to seize the property. This motion is being considered by the Pechersk District Court of Kyiv.

On September 5, 2024, the Prosecutor General’s Office for the third time filed a motion to seize semi-railcars of Poltava Mining, similar to the previous two, with the Pechersk District Court of Kyiv. It is currently known that it will be considered on September 26, 2024.

On September 24, the PGO submitted to the court an indictment and a register of criminal proceedings against four officials of the company and officials of another private entity. Representatives of the Mining also informed the investigating judge of this during the court hearing held the day before.

Therefore, in accordance with Article 170 of the Criminal Procedure Code of Ukraine, the Pechersk District Court of Kyiv no longer has jurisdiction to consider this motion. This is due to the fact that after the indictment is submitted to the court, all motions for the seizure of property must be considered by the court that is considering the case on the merits. In this case, it should be the local court at the location of the company. However, the Pechersk District Court of Kyiv is still considering the motion.

Poltava Mining, in continuing consultations with legal advisors in Ukraine, assesses the request to ban the use of its railcars as a harmful, disproportionate, excessive and unlawful interim measure for a number of reasons.

• The vast majority of the seized railcars were not used to transport the products whose legitimacy was investigated by the SBI. Only 158 out of 2,382 of them were transporting products to which the investigators of the Bureau have complaints. Therefore, there are no reasonable grounds to seize all the railcars owned by Poltava Mining, let alone ban their use.
• The capital value of the seized property is five times higher than the amount of the claimed “losses”. The ban on the use of the company’s own railcars is an excessive measure, and the alleged “losses”, if confirmed, can be reimbursed with working capital.
• The ban on the use of railcars jeopardizes the timely fulfillment of contractual obligations to international customers, which may lead to the loss of partnerships and the replacement of Ukrainian products with Russian counterparts.
• The ban on the use of semi-railcars makes it impossible to carry out their scheduled maintenance and overhaul, and prolonged non-use of this rolling stock will turn it into scrap.

In addition, Poltava Mining notes that, in addition to the company’s semi-railcars, the products whose legality is being investigated by the SBI were also transported by semi-railcars of other owners, including the state-owned JSC Ukrainian Railways. However, the prosecution does not initiate the seizure of semi-railcars of other carriers (owners).

“The company once again calls on the prosecutors of the Prosecutor General’s Office to stop illegal, unlawful actions that do not comply with the law, public interests and are aimed at creating obstacles to the company’s business activities and to withdraw the arrest petition,” the statement said.

In January-June 2024, Ferrexpo invested $55 million in production facilities. The cost of maintenance and modernization amounted to $19 million, and strategic development projects – $36 million.