- Trafigura faces a $577 million loss on nickel shipments in what the company calls a systemic fraud, according to Bloomberg.
- The commodities trading giant discovered some of the metal cargoes it bought were missing nickel.
- Trafigura has launched a legal action against Indian businessman Prateek Gupta and connected companies.
Commodities trading giant Trafigura is facing a $577 million loss and says it has uncovered a systemic fraud perpetrated against it, sources told Bloomberg.
The company, one of the world’s largest traders of energy and metals, said it found out that some cargoes it had bought didn’t contain the nickel they were supposed to, and spent two months uncovering the scheme, per the report.
A full container of nickel, an expensive metal that is typically traded in large volumes, can be worth roughly $500,000.
“Since late December 2022, a small proportion of the containers purchased from these companies have been inspected as they reached their destination, and were found not to contain nickel,” Trafigura said in a statement, according to Bloomberg. “The majority of the shipments remain in transit awaiting further inspection.”
Trafigura has begun legal action against Indian businessman Prateek Gupta and several companies connected to him, including TMT Metals and UD Trading Group. The groups have traded with one another since at least 2015, but began reviewing the relationship last year.
When contacted by Bloomberg, UD Trading’s Dubai office had no comment, and its calls to TMT Metals’ London office went unanswered.
While Trafigura faces an impairment of more than half a billion dollars, the final cost could be lower if it is able to recover some of the funds.
Trafigura maintained that it doesn’t think anyone internally was complicit in the fraud, and it “remains committed to building its presence in the fast-growing battery metals markets,” according to Bloomberg.