Officials of the financial police of Bosnia and Herzegovina's Federation entity on Wednesday started an investigation into reports of financial wrongdoing at the Mostar-based Aluminij smelter, which in July stopped operating due to debts exceeding EUR 200 million.

The prosecutorial authorities of Herzegovina-Neretva Canton ordered the investigation after reports of wrongdoing were filed by workers’ and union representatives as well as on the basis of earlier cases which the financial police had worked on.

The reports were filed mostly against members of the company’s current and previous management and supervisory boards, the prosecutorial authorities said.

The smelter stopped operating in early July after it was disconnected from the power grid because its losses exceeded EUR 200 million and the management was no longer able to pay for new electricity and raw material purchases.

The collapse of the company has to do with high, uncompetitive electricity prices and bad business contracts.

The majority owner of Aluminij is the government of the Federation entity, which holds a 44% stake, workers hold a 44% interest while Croatia owns a 12% share.