Investors have breathed a sigh of relief after the charity saga which has engulfed iron ore miner Ferrexpo (FXPO) cleared its directors of any wrongdoing.

An independent review into whether donations made by Ferrexpo to Ukrainian charity Blooming Land had been misappropriated found that funds may well have been misued, but absolved all Ferrexpo directors and staff of any blame.

The firm’s former auditor Deloitte resigned in April saying it was unable to establish whether or not Ferrexpo’s co-founder and chief executive Kostyantin Zhevago controlled Blooming Land.

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Problems had come to light at the start of the year when Deloitte received bank statements from Blooming Land containing ‘irregularities’. Ferrexpo subsequently set up an independent review commission to investigate discrepancies in payments to the charity.

Ferrexpo’s annual report had to be delayed twice because of the saga and its share price plunged by almost a third when Deloitte resigned.

But following the news this morning shares in Ferrexpo were up 4% at one point to 206p, although the price has since eased back to 202.6p.

The share price rise may have been larger were it not for the review’s conclusion that it ‘has not been possible to explain a number of discrepancies’ and that some of the charity’s funds ‘could have been misappropriated.’

Blooming Land was set up to co-ordinate Ferrexpo’s corporate social responsibility programme, and provides medical and social services to local communities.

The company has now ended its relationship with the charity.

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Issue Date: 30 Aug 2019