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Aurubis, Europe’s largest copper producer, said it suffered a loss of 185 million euros due to alleged massive fraud involving collusion between suppliers and employees after it discovered a shortage of the metal in its inventory.

The Hamburg-based company said on Tuesday it expected pretax operating profit in the year to this month to be between 310 million euros and 350 million euros, down from a previous forecast of 450 million euros to 550 million euros before announcing the findings. . “criminal activities”.

The group’s share price plunged on September 1 after it revealed an alleged collusion between scrap suppliers and employees at sampling unit Aurubis, which resulted in lower than record metal levels in its stockpiles.

After Aurubis carried out an inventory check of metal stocks at its Hamburg plant, the company discovered a discrepancy of €185 million between listed and actual inventories.

These differences are mainly reflected in stocks of precious metals such as gold, silver and palladium.

Aurubis, which disclosed the alleged criminal conduct late on August 31, warned that the financial impact of the fraud could be in the “low” hundreds of millions of euros, and on Tuesday clarified the scale of the losses for the first time.

This figure covers inventory losses resulting from two separate schemes: actual theft of precious metals and a massive fraud that misrepresented the content of metals supplied to Aurubis.

Police raided the company in June to investigate an “organized theft ring” linked to the missing goods, and authorities had obtained arrest warrants worth more than €20 million.

Orubis said it was unlikely that the criminal organizations behind the two scandals were related, but that the possibility could not be ruled out yet.

Aurubis said it expected insurance payouts and asset seizures of around 30 million euros should “partially compensate” for the losses. It has taken some steps to improve security.

The cases rocked the global metals industry after a series of other scandals last year, including the involvement of Trafigura, one of the world’s largest commodities traders, in a $590 million nickel fraud.

In an incident announced in late August, scrap samples sent to laboratories for testing may have been manipulated to show a certain metal content that Aurubis paid suppliers. Virtually no scrap, or scrap containing much lower value metals, is transported to the site to be converted into usable materials.

Europe’s largest producer of refined copper is betting its future on the growth of recycled metals, including expanding its U.S. operations by investing 300 million euros to build a secondary smelter in Georgia.

Aurubis shares rose nearly 3% on Tuesday after clarifying the scale of the losses, but were still 8% lower than before the fraud was announced.

German steelmaker Salzgitter, which owns about 30% of Aurubis, also suspended guidance and said it planned to issue an update to shareholders this week.

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