ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / NEWS

All About the Massive Scam That Exposed Chinks in the Armour of a Major Copper Producer

Negligence within supply chains and other operational processes can lead to significant financial losses.
PUBLISHED MAR 3, 2024
Cover Image Source: Scrap copper | Getty Images | Photo by Sascha Schuermann
Cover Image Source: Scrap copper | Getty Images | Photo by Sascha Schuermann

No industry has been left untouched by fraudulent schemes, and now a scam has also penetrated the metal sector as one of the world's largest copper producer, Aurubis, has been hit by scandal. The company recently faced a staggering loss of $198 million, as the fraud unfolded on a large scale, involving company employees and suppliers. Investigators say that the fraud occurred through the falsification of metal container quantities and values on invoices. However, Aurubis plans to recoup its losses through insurance claims, capped at around $34.5 million, and is actively pursuing the culprits. 



 

The fallout from this loss has been severe, with Aurubis stock plummeting by 18%. This incident follows another criminal attempt earlier last year when a group tried to steal the company's metals. 

Aurubis had initially projected pre-tax earnings of $485 million for the 2022-23 financial year. However, following the million-euro fraud, the company has retracted its forecasts, grappling with the daunting task of recovering from substantial losses.



 

Aurubis, formed through the merger of Cumerio and Norddeutsche Affinerie in 1866, operates as a publicly traded corporation. Salzgitter AG holds the majority stake in Aurubis, followed by Silchester International Investors LLP and BlackRock Inc. Headquartered in Hamburg, Germany, the company focuses on recycling materials into valuable commodities, with production and sales spanning three continents and over 20 countries.

Moreover, the company has emerged as a global leader in copper recycling and non-ferrous material production, driven by a longstanding commitment to sustainability and innovation spanning more than 150 years. Through recycling and processing copper products and producing metal concentrates, Aurubis preserves the purity and value of materials. The company continually explores innovative techniques and invests in employee education to ensure the production of environmentally friendly products.



 

The scam has led to scrutiny regarding oversight lapses, since it isn't possible for a single individual or error to orchestrate such a massive fraud. This points towards a series of missed indicators that scammers exploited, resulting in substantial losses for the copper market leader. 

Following the scam, Aurubis AG is in the process of considering the termination of contracts for its chief executive and two other executive board members. The supervisory board of the company is engaged in advanced discussions with Chief Executive Officer Roland Harings, Chief Financial Officer Rainer Verhoeven, and Chief Operating Officer Heiko Arnold regarding the potential termination of their contracts, as announced by the company last month. Additionally, the company disclosed the possibility of appointing Markus Kramer from the supervisory board to the executive board.

Moreover, the CEO stated that the company had undertaken comprehensive process revisions to minimize the possibility of similar fraud incidents recurring, aiming to make such occurrences "difficult if not impossible."



 

In the volatile landscape of business, crises or frauds can strike unexpectedly, with no predetermined extent of damage. Thus, proactive preparation is key, involving establishing fixed provisions and reserves to cushion potential losses and prevent bankruptcy. A meticulously crafted plan, coupled with effective execution and strategic implementation, can protect organizations against becoming a victim of such unforeseen circumstances.

MORE ON MARKET REALIST
The seemingly tough puzzle cost contestant, Kelly Amodio a brand new Mini Cooper.
26 minutes ago
The contestant, Jodi Hope took home $75,000, using her puzzle solving skills.
1 hour ago
The guest had to promise on camera to share the profits with her friend who gifted the item.
19 hours ago
Harvey just couldn't seem to understand what Giuliana Rancic's mother was saying.
20 hours ago
Harvey had to take a moment to school the contestant on how the game is played.
22 hours ago
It seemed like Veronica forgot she was holding the host's hand after the win.
23 hours ago
The owner of the Jean-Michel Basquiat Oil Stick Painting made it clear that it wasn't going anywhere
1 day ago
The player, Jason Warren missed out on taking home more than $86,000.
1 day ago
The TikTok creator @thebiteo87 stirred a debate on social media by exposing the new tactic.
1 day ago
Harvey couldn't believe what the NFLPA stars would choose for their wives to wear
1 day ago
Harvey barely held on to the podium after hearing the answers that shook him.
2 days ago
The celebration was justified as Joseph won a brand new car on his birthday.
2 days ago
The player, Shaunica Amantine missed out on taking home over $82,000 over the seemingly tough puzzle
3 days ago
After nearly losing a brand new car, Dylan got a second chance to take it home.
3 days ago
The seller Robert, chose to keep to his one-of-a-kind Boba Fett prototype, expecting to get more.
3 days ago
The player, Cherie Noisette, missed on out taking home more than $61,000 in prizes.
3 days ago
The seller refused to accept a lowball bid for his signed, rookie Mickey Mantle card.
3 days ago
Harvey couldn't relate more with the contestant and demanded the response to be number 1.
4 days ago
The player also brought her husband along on the stage to support her.
4 days ago