Latest News

Trafigura warned Prateek Gupta about nickel cargoes in a court document

Gupta claimed in a court filing that a letter from Trafigura sent to Prateek Gupta’s company, warning them not to raise suspicions with Citi regarding nickel cargoes, provided evidence that the commodity traders were aware of fraud. In February 2023, Geneva-based Trafigura sued Indian businessman Gupta claiming it was the victim of $600-million nickel cargo fraud. Gupta had previously claimed in his defense that Trafigura employees were responsible for the scheme at the heart of the case. Gupta’s lawyers added the new letter to an amended defence document filed last week, which was released by court.

Trafigura is a major trader in industrial metals and oils. It has denied for years that any of its employees were aware of the alleged fraud, where low-grade materials like scraps were substituted with high-grade Nickel.

Trafigura has declined to comment Thursday.

Trafigura, a Geneva-based company, booked a loss of $590m in 2023.

Citi contributed up to $850 million towards a complex "transit finance" operation, in which Trafigura would purchase nickel cargoes from Gupta and then repurchase them by Citi, before reselling the nickel back to Gupta.

The new defense document alleges Trafigura and Gupta worked together to increase the duration of the credit period offered by Citi, and to reduce the likelihood of port warehouse inspections that could reveal the true contents of the cargo.

Citi declined to make a comment.

In the letter, dated Jan 2022 and cited in a defence document from a Trafigura worker based in Mumbai, to a Gupta staffer, it was alleged that banks would find it unlogical for a journey from Taiwan to mainland China to take 95 days, when it would normally only take a few days.

The letter stated that "Citi accepted this one with little suspicion but we may not be as lucky in future." Gupta's attempt to convince a London court in December 2023 to lift the global freezing order placed on his business and personal assets failed.

Gupta’s lawyers claimed Trafigura had not disclosed important information. A judge rejected this argument.

Both sides are currently going through the disclosure process to obtain additional documents and witness testimony before trial. (Reporting and editing by Barbara Lewis; Eric Onstad)

(source: Reuters)