LONDON (Reuters) -Trafigura’s $600 million case against Indian businessman Prateek Gupta over fake nickel cargoes began at London’s High Court on Monday, with the commodities trading company saying it was the victim of a very substantial fraud.
Geneva-based Trafigura alleges that Gupta was the mastermind of a fraud it discovered in November 2022, when it inspected some containers that were supposed to contain high-grade nickel.
The containers actually held carbon steel worth a fraction of the value of nickel, prompting Trafigura to carry out further inspections, book a $590 million charge and then sue Gupta and his companies in February 2023.
Gupta accepts that purported high-grade nickel cargoes actually contained low-value materials but says that Trafigura staff devised the scheme, with the parties essentially trading the differences in the price of cargoes at different times.
He says Trafigura came up with a complex merry-go-round of transactions that would appear to inflate its standing, involving more than 500 trades valued at $3.3 billion.
Trafigura denies there was any such agreement, with the company’s lawyers saying Gupta and his companies’ defence is “a fiction conceived after the event by admitted fraudsters”.
Nathan Pillow, a lawyer representing Trafigura, said: “Trafigura paid for rubbish and was left with hundreds of millions (of dollars) of losses.”
Trafigura has been left with metal “worth around 2% of what we paid for it” after recouping about $10 million from trades worth more than $500 million, Pillow added.
Gupta is expected to give evidence at the five-week trial, as will former senior executives at Trafigura.
(Reporting by Eric Onstad and Sam TobinEditing by David Goodman)
