Ferrexpo PLC on Thursday said curbs have been placed on two of its subsidiaries in Ukraine, amid ongoing legal proceedings against the iron ore pellet producer’s largest shareholder.

Ferrexpo shares traded 2.6% lower at 77.15 pence each in London on Thursday morning.

The company said its Ferrexpo Yeristovo Mining and Ferrexpo Belanovo Mining units have been sent documents from the Ministry of Justice of Ukraine. The FTSE 250 listing’s Swiss subsidiary, Ferrexpo AG, is prevented from transferring its roughly 50% stake in the Ukrainian units.

The curbs do not otherwise affect Ferrexpo AG’s ownership in the units, including its rights to dividends and exercising voting rights. The firm’s operations are also unaffected.

The restrictions are part of ongoing legal proceedings against Kostyantin Zhevago, who owns roughly 50% of Ferrexpo. They are an ‘initial stage in the enforcement process’ to satisfy a $44 million debt owed by Zhevago to the National Bank of Ukraine, Ferrexpo added.

Ferrexpo said it has received legal advice and believes the curbs placed on its Ukraine units to be ‘unlawful’.

‘The shares in FYM and FBM are wholly owned by the Ferrexpo group and not any other person as a matter of Ukrainian law. The group is currently analysing the potential legal and other remedies available to it and intends to defend its rights,’ the company explained, adding that the enforcement process could ultimately lead to a possible sale of its stake in the Ukraine units.

Back in December, Zhevago stepped down from the iron ore pellet producer’s board, after he was detained in France at the request of Ukrainian authorities. Ukraine’s state bureau of investigation said the matter was in relation to money laundering and the disappearance of $113 million.

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