Trafigura won its London lawsuit against Indian businessman Prateek Gupta over fake nickel cargoes on Friday, with London’s High Court ruling in favor of the commodities trader.
Geneva-based Trafigura alleged Gupta was the mastermind of a fraudulent “Ponzi scheme” in which he and his companies agreed to provide high-quality 99.8% pure nickel but delivered low-value or even worthless materials instead.
Gupta accepted he did not deliver high-grade nickel cargoes but says Trafigura staff devised the scheme, something Trafigura’s former head nickel trader Sokratis Oikonomou denied when giving evidence in November.
Read more: Trafigura Lawyers Claim Gupta Had History of Fraud Before Alleged $600M Nickel Scam
Judge Pushpinder Saini ruled that Trafigura was induced to enter into contracts “by false and fraudulent representations” made by Gupta and his companies.
The judge also said Trafigura’s former employees, including Oikonomou, were “wholly innocent of any wrongdoing.”
A Trafigura spokesperson said the ruling “comprehensively finds in favor of Trafigura and recognizes the systematic fraud perpetrated by Mr Gupta and the corporate defendants.”
“We are continuing to pursue recovery from Mr Gupta,” the spokesperson added.
A lawyer who represented Gupta did not immediately respond to a request for comment. Court records showed the law firm which represented Gupta at trial no longer represented him.
‘No Real Defense’
The trial, which concluded in December, was the culmination of events that began in November 2022, when Trafigura first received complaints about cargoes it had sold.
The discovery prompted Trafigura to carry out further inspections, book a $590 million charge and then sue Gupta and his companies in February 2023 for what it then described as “systematic fraud.”
Trafigura argued during the trial that Gupta had a history of fraudulent dealings and accused him of siphoning off funds from the alleged scheme to support his struggling businesses.
Gupta, who gave evidence remotely from Dubai, said Trafigura came up with a complex merry-go-round of transactions that would appear to inflate its standing in nickel trading. His lawyers said the scheme involved over 500 trades valued at $3.3 billion.
But Trafigura’s lawyers said this was simply an attempt to explain the admitted fraud and described Gupta’s evidence as “implausible, inconsistent … and plainly incredible.”
Saini said in his ruling that “having no real defense to the fraud claim, Mr Gupta decided to go ‘on the attack’ by inventing the story of the arrangement.”
(Reporting by Sam Tobin; editing by William James, Elaine Hardcastle)
