Trafigura $600m Fraud Trial Centres on Nickel Cargoes

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.

59 orders wipe out $58bn of market value from Nifty

One Broker Broke the Market

Friday's debacle on the Nifty (aka Nifty 50, India's benchmark free-float market cap index) resulted in a brief erasure of $58bn from the National Stock Exchange (drop of 16% in the index value). The culprits, Emkay Global Financial Services Ltd., admitted $126m volume-worth of orders triggered the problem, which fired off circuit breakers on the National Stock Exchange (wrong data entry on a basket sell order).

Protected by the Circuit Breakers

The NSX (whose corporate HQ is in Bandra, Mumbai) triggers circuit breakers when there is a 10% or larger move (check out this guide to Asia circuit breakers).

Whose in the Nifty Fifty

Stocks in the "Nifty 50" include Tata Steel, GAIL (India) Ltd, Axis Bank Ltd., ICICI Bank Ltd and Jaiprakash Associates.

Many of these stocks (Tata Steel, for example) are also part of the Sensex (or BSE 30) which are the 30 largest stocks on the Bombay Stock Exchange.

brightspark(fincrisis, X). ? X = posco

business(posco, X). ? X = koreanSteelMaker
founded( X, Y ). ? X = 1968, Y = taeJoonPark.
posco_bondissue = bondissue( Value, Term, Time ). ? Value = usd(700m), Term = years(5), Time = mar09.
concerns( posco_bondissue, X). ? X = shortTermNegativeOutlookSteelSector, heightendMilitaryTensionsPyongyang.

pyongyang == capital of north korea.

"First USD offering from an Asian corporate since Hong Kong & China Gas $1bn issue in July 2008" (source: financeasia).

Friends Down, Pfizer eats Wyeth, Steel down 50% since Sep08

The Sales for Friends Provident (the UK pensions and insurance tout) were down 27%, but only down 4% in the fourth quarter. Current CEO Trevor Matthews (formerly with Standard Life) joined as CEO in July 2008. It is interesting to understand the origins of Friends Provident. Friends was founded in Bradford in 1832 and has Quaker origins (Samuel Tuke and Joseph Rowntree). Their aim was "to provide the security of life assurance" to Quakers and their families. 45 friends put up an initial £10,700 Guarantee Bond. The company demutualised in 2001, with a big IPO advertising campaign entitled "You're better off with Friends". Its debt issuer credit rating is BBB (good). 

Pfizer, the world's biggest pharmaceutical company, is expected to conduct a blockbuster takeover of US rival Wyeth for between $65bn and $70bn (editor: deal closed at $68bn). 

Pfizer, being advised by Merrill Lynch and Goldman Sachs, is under pressure from investors to replace >$12bn revenues the company may lose in three years (that's an average $4bn a year) when Lipitor, the cholesterol pill and best-selling medicine in history, faces competition from generic drug makers (the patent expires in November 2011). 

Wyeth is being advised by MS and Evercore Partners (based in East 52nd Street, New York). Pfizer's R&D investment is impressive; at Sandwich, Kent, over 2000 drug-searching scientists are employed. The transaction consisted of cash, debt and stock. 

Corus, the largest steelmaker in the UK and a subsidiary of Tata Steel, is expected to announce the loss of 3,500 jobs as demand falls from carmakers and the construction industry. Steel prices have dropped 50% since September. Steel derivatives on the LME offer risk management for the steel industry. Hot places to trade steel derivatives include the LME, CME, Shanghai Futures Exchage, India and Dubai. 

India is the world's fifth largest steel maker, China is the largest.