A statement has been made to the Australian Stock Exchange in which Sims Metal Management has warned that it may have been subject to fraud at two of its UK recycling facilities.
In the statement, Sims said that it has identified that the carrying value of inventory in its UK business is materially overstated.
It identified the sites as Long Marston and Newport, both of which handle metals and WEEE.
It said that it currently believes the inventory adjustment to be in the region of $60 million (£37 million) and relates both to the assessment of the net realisable value of certain stock and to book to physical adjustments.
In the statement, it added: “The preliminary findings indicate the situation has arisen in the context of control failures and potential fraudulent conduct by local and regional plant management responsible for technology and downstream processing systems in the UK.”
A special committee of the company’s board has been put together to investigate the matter along with auditor PwC and legal counsel Baker & McKenzie.