Commodity trader Trafigura’s legal team has accused Indian businessman Prateek Gupta of diverting funds from an alleged $600 million metals fraud to support his struggling business operations. Trafigura, a Geneva-based company, initiated legal action against Gupta two years ago, claiming he orchestrated a scheme involving the delivery of steel or scrap instead of the agreed-upon pure nickel. Trafigura is one of the world’s leading commodity trading companies, specialising in the oil and petroleum, minerals and metals, and gas and power markets. The company operates by sourcing, storing, blending, and delivering essential raw materials.
During his testimony at London’s High Court, Gupta admitted that his UG Group of companies faced financial difficulties in March 2021, partly due to the COVID-19 pandemic. He also acknowledged that his companies received approximately $500 million for pure nickel but shipped containers filled with low-value metals. When questioned about the profits, Gupta stated that a portion was used to cover increased shipping expenses. However, Trafigura’s lawyer, Nathan Pillow, questioned Gupta directly about where the money went and if he siphoned it off, accusing him of relying on the alleged fraud to keep his companies afloat.
Gupta, appearing via video link from Dubai, denied running the cash flow. He has maintained throughout his testimony that he lacked knowledge of the operational specifics, attributing responsibility to others. Gupta stated in court documents that nickel-labelled shipments traded with Trafigura totalled 22,500 metric tons from October 2017 to May 2019, increasing to 57,222 tons in 2020 and 69,165 tons in 2021.
Trafigura’s lawyers previously accused Gupta of prior fraudulent activities. Gupta acknowledged an ongoing fraud investigation in India but denied those allegations as well. His defence hinges on accusations against Trafigura staff, alleging they devised a covert plan to substitute metals to enhance Trafigura’s position in the nickel market. He claims this scheme began in 2019 when he was asked to significantly increase nickel trading under the direction of Sokratis Oikonomou, who has since denied involvement in the alleged fraud.
