Deloitte resigns from his position as auditor at Ferrexpo following an investigation into a charity

Deloitte resigned as Ferrexpo's auditor a few days after the companies clashed over potential ties between the Ukrainian miner's chief executive and a charity foundation being investigated for a possible embezzlement.

London-listed Ferrexpo shares tumbled more than 20% on Friday after the miner disclosed that Deloitte had resigned with "immediate effect". Ferrexpo has not provided any other details.

The resignation of one of the world's four largest accounting firms comes after Ferrexpo, which produces the iron ore used for steelmaking, published its annual results twice earlier this week. Deloitte issued an opinion with the numbers, indicating that it had not been able to find enough evidence to conclude that Kostyantin Zhevago, managing director and billionaire of Ferrexpo, had no connection with Blooming Land, a trust created to manage his charity work in the country.

Ferrexpo did not agree with Deloitte; its board of directors reached the "unanimous" conclusion that Mr. Zhevago, who owns just over 50% of the miner, exercised "no significant influence or control over Blooming Land".

The resignation of Deloitte is a further setback for Ferrexpo, which is trying to restore confidence with its shareholders. It was a group of emerging-market mining companies in London at the time of the commodity boom of the 2000s.

Deloitte declined to comment Friday, but under UK law he has 14 days to send a letter of resignation to Companies House, a public register of companies.

Earlier this week, the audit firm stated that it had not been able to obtain "satisfactory" evidence or explanations that Ferrexpo's $ 33.5 million paid to Blooming Land had not been "hijacked". In its nuanced opinion, Deloitte also referred to "certain criminal proceedings" that had been initiated against Blooming Land in Ukraine.

Ferrexpo, one of the world's largest producers of small iron ore balls directly into blast furnaces, said an independent committee set up to review payments at Blooming Land had "received evidence and explanations from third parties "likely to explain some" discrepancies in the use of funds ".

Ferrexpo's non-executive directors include Steve Lucas, a chartered accountant, and Mary Reilly, a former partner with Deloitte's audit firm.

Deloitte's resignation comes after the UK's competition watchdog group this month called for legislation to end the dominance of the big four accounting firms and the problems of poor work practices and conflicts of interest in the industry. sector hit by scandal. Deloitte, EY, KPMG and PwC have all been criticized after a series of audit failures, including those of BHS and Carillion.

In Ferrexpo's 2016 Annual Report, Deloitte did not raise a problem with Blooming Land, stating that it had reviewed the minutes of the Board of Directors and the financial statements of the Trust. A year later, Deloitte stated that it had identified a risk that payments made by Blooming Land to three related charitable funds could be diverted. However, he did not offer a nuanced opinion on the accounts.

Blooming Land, which provides diabetes prevention, vision care and elderly care services in Ukraine, could not be contacted immediately for comment.

Ferrexpo was formerly a member of the FTSE 100 index of major stocks, but collapsed following the fall in steel prices during the global financial crisis. Ian Hannam, the former banker of JPMorgan, formerly known as the "King of Mines" for his ties to numerous transactions in the natural resources sector, was behind the listing of the company in 2007 at 140p per share .

Ferrexpo shares were trading at 207p late Friday morning.

In 2015, a bank owned by Mr. Zhevago – and holding most of the miner's money – went bankrupt, forcing the company to write off $ 174 million.