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In response to Trafigura’s accusation of a $590mn nickel fraud, businessman Prateek Gupta has stated that it was, in fact, Trafigura who devised and proposed the fraudulent scheme according to court filings. The defence alleges that Trafigura employees suggested trading different materials as nickel trades to deceive Citibank, the commodity trader’s lender.
Trafigura froze Gupta’s assets worldwide, claiming to be a victim of systematic fraud. However, Gupta’s defence is the first account that sheds light on the scandal, highlighting the due diligence procedures at Trafigura. The case is set to be heard in London’s High Court, with the alleged claim that Trafigura traders initiated the scheme.
Gupta’s defence identifies Trafigura’s former head of nickel, Sokratis Oikonomou, and senior Mumbai-based trader Harshdeep Bhatia as the individuals who proposed the scheme. The defence describes a series of meetings in luxurious hotels across Dubai and Mumbai where the fraudulent plan was conceived and later revealed.
The defence further explains that the scheme involved Gupta’s companies purchasing nickel, alloy, or scrap from other traders and selling them to Trafigura. Gupta claims that the scheme was devised to meet Trafigura’s required trading volumes and that Citi, Trafigura’s financing bank, had strict credit requirements for nickel trades.
Gupta’s defence also presents the case of four firms associated with him and denies being the legal controller of other entities listed in Trafigura’s claim. The introduction of these additional companies was allegedly intended to reduce suspicion from Citi due to high volumes of trades with entities under common ownership.
As tensions rose between Trafigura and Citi, Gupta claims that Trafigura pressured him to present containers filled with nickel for inspection, aiming to avoid exposing the fraudulent arrangement and appeasing the bank. Ultimately, Citi withdrew its credit line, leading to significant red flags for the trading scheme.
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