Sims Metal to take hit amid fraud probe
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Recycler Sims Metal Management will write down the value of inventory at its British operations by $78 million after uncovering a possible case of fraud.
Sims on Friday also revealed it would take a $354 million hit from impairment charges related to its UK and US operations.
Of that, a $63 million impairment charge will be taken in relation to UK Metals and UK Sims Recycling Solutions, with the other $291 million for North America Metals.
Sims last month warned of possible fraud at two of its British electronics recycling sites and launched an immediate investigation.
The investigation, which is mostly complete, has uncovered allegations of potential fraud at its operations in the Welsh town of Newport and Long Marston, near Birmingham in England.
Those claims are being further investigated.
Sims had initially expected to write down the value of its inventory at Newport and Long Marston by $60 million, but the figure has blown out to $78 million following the investigations.
Sims said $16 million of the inventory writedown would impact on its first half earnings results, due out next week.
The balance would be restated in its previous accounts.