Shares of indebted Bosnian alumina plant suspended

The Banja Luka Stock Exchange on Monday suspended trading in the heavily indebted alumina plant Birac ad Zvornik, which is subject to bankruptcy proceedings, for 11 days, it said on its website.

The government of Bosnia's autonomous Serb Republic ordered the tax authority at the weekend to launch bankruptcy proceedings at the loss-making plant, majority-owned by the Lithuanian lender Ukio Bankas, which is itself being taken over after going into administration.

The decision follows a police investigation last week into alleged tax evasion and irregular spending at the Birac plant.

"The stock exchange has temporarily suspended trade in stocks of the issuer Birac Zvornik to enable investors to get full information about the condition of the issuer," the BLSE said in a statement.

It said the suspension would last until April 19.

Ukio Bankas has been controlled by Vladimir Romanov, also owner of the cash-strapped Scottish soccer club Hearts, although Ukio is being taken over by Lithuania's Siauliu Bankas .

Last Friday, Romanov called an assembly of Birac's shareholders and appointed a new managing board to draft and adopt a new business plan.

Birac shares last traded on April 4 at 0.01 Bosnian marka, 17 percent down from the previous day's close, after police entered the plant to inspect it.

Birac, Bosnia's sole alumina plant, is located in the eastern town of Zvornik and has been struggling under mounting debts.

Officials of the Serb Republic's government have said the bankruptcy procedure is the only way to determine the state of the plant with the aim of maintaining production and paying off creditors and suppliers.