Geneva-based Trafigura is suing businessman Prateek Gupta for running a "Ponzi scheme" and "systematic fraud" alleging he substituted $600m of nickel cargos (meant to be 99.8% pure) with low-value carbon steel.
Gupta has admitted to supplying fake cargoes but counterclaims that the scheme was orchestrated by Trafigura themselves, to elevate their standing in the nickel market but giving an impression of high trading volume.
Complaints around the cargos started coming in around November 2022. Nathan Pillow, lawyer for Trafigura, was quoted as saying the company had "paid for rubbish".
Citi was also involved in the financing of these deals.
The scheme was apparently disrupted when Citi, spooked by rising nickel prices, demanded return of physical nickel cargoes.
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