In a statement released today (January 21), Sims revealed that alleged control failures at Sims Recycling Solutions recycling facility in Newport, South Wales and its WEEE recovery plant in Long Marston, Warwickshire are being examined.
The investigation is being headed by a special committee comprising the companys chairman Geoff Brunsdon, chief executive Daniel Dienst and chief financial officer Rob Larry, as well as external auditors PricewaterhouseCoopers (PwC) and legal counsel Baker & McKenzie.
In its statement, Sims said: Sims Metal Management Limited advises the market that it has identified that the carrying value of inventory in its UK business is materially overstated. The inventory in question is predominately associated with the Companys Recycling Solutions business at Long Marston and Newport.
Based on information received by Senior Management and the Board, the Company currently believes the inventory adjustment to be circa $60 million (37 million) and relates to both changes in the assessment of the net realizable value of certain stock and to book to physical adjustments.
Investigation
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.
The committee is currently seeking to determine how the overstatement occurred and what effect it is likely to have on the companys accounts, as well as determining if any action will be taken against employees.
Sims Recycling Solutions processes over 150,000 tonnes of WEEE at 12 sites across the UK, including household and non-household WEEE. Its UK headquarters is based close to the Long Marston facility.
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The Newport WEEE reprocessing facility, opened in February 2009, was built at a cost of 12 million. The plant uses technology to separate materials including copper, aluminium and plastics from waste electrical which are sold for manufacture into new products.
The company also has facilities in Austria, Belgium, the Czech Republic, Hungary, Poland, Sweden, the Netherlands and Germany, recycling around 300,000 tonnes of electronic waste each year.
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