{"id":150487,"date":"2025-11-24T16:10:08","date_gmt":"2025-11-24T16:10:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/150487\/"},"modified":"2025-11-24T16:10:08","modified_gmt":"2025-11-24T16:10:08","slug":"trafigura-trade-finance-team-alarmed-by-strange-gupta-nickel-scheme-years-before-it-unravelled","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/150487\/","title":{"rendered":"Trafigura trade finance team alarmed by \u201cstrange\u201d Gupta nickel scheme years before it unravelled\u00a0"},"content":{"rendered":"

The High Court trial of Trafigura v Gupta has entered its second week<\/p>\n

Trafigura\u2019s trade finance team raised concerns about the commodity trader\u2019s relationship with Prateek Gupta more than two years before the company discovered what it alleged was a massive fraud by the Indian businessman, a London court has heard. \u00a0<\/p>\n

In February 2023, Trafigura accused Gupta of selling containers of what it thought was high-grade nickel, but which were later found to contain largely worthless goods, leading to losses of at least US$600mn<\/a>.\u00a0<\/p>\n

Gupta has not denied that the cargoes were not nickel, but alleged in response that Trafigura devised the scheme<\/a> and was a knowing participant.\u00a0<\/p>\n

As the case entered its second week<\/a>, the court was today shown a September 2020 email from Trafigura\u2019s then-head of trade finance for refined metals, Thibaut Barthelme, describing the nickel trading relationship with Gupta\u2019s companies as a \u201cstrange business\u201d. \u00a0<\/p>\n

\u201cWe have become the bank of this company,\u201d Barthelme said.\u00a0 <\/p>\n

The email was sent to bring the relationship to the attention of global trade finance head, Camille Trejou, and then-global head of structured and trade finance, Stephen Jansma, now Trafigura\u2019s chief financial officer.\u00a0<\/p>\n

Barthelme\u00a0said he wanted to flag the dealings with Gupta\u2019s companies \u2013 collectively known as UIL \u2013 to his superiors because it was not getting enough internal scrutiny within the Singapore-headquartered trader.<\/p>\n

He also highlighted \u201cthe potential reputational risk if it goes sour\u201d. \u00a0\u00a0<\/p>\n

\u201cThe voyage time is extremely long (min 3-4 months, up to 6 months(!) as the material gets discharged and picked up again in ports along the way\u201d, Barthelme wrote, arguing it was odd that UIL were not trying to get the goods to their end customer more quickly. \u00a0<\/p>\n

He also said in his email that it seemed that the end buyers, New Alloys and Minecraft, were related to UIL.\u00a0<\/p>\n

Barthelme added that UIL were willing to accept high interest costs and irregular sales. The email noted that UIL owed money to both Credit Suisse and Deutsche Bank, and that both lenders had \u201crefused any payments\u201d from Trafigura to UIL.\u00a0<\/p>\n

Another member of the trade finance team followed up Barthelme\u2019s concerns with an email suggesting UIL \u201cis doing this business in order to use the BLs [bills of lading]\u201d to obtain further financing. \u00a0<\/p>\n

The first witness to give evidence in the trial, Trafigura\u2019s former nickel trading head, Socrates Economou, said he could not recall whether Jansma discussed the email or the Gupta business with him. \u00a0<\/p>\n

Economou also said he did not know why Barthelme\u2019s email erroneously said that the trader\u2019s operations team were inspecting the cargoes to see if they contained LME-grade nickel. No inspections took place until late 2022, the court has previously heard.<\/p>\n

Former nickel head denies \u201carrangement\u201d existed\u00a0<\/p>\n

At the time of the email, around half of the refined metals desk\u2019s trade finance business was taken up by the Gupta trades, the businessman\u2019s barrister, Louise Hutton, told the court.\u00a0\u00a0<\/p>\n

Gupta\u2019s lawyers have claimed that staff at Trafigura were aware of the real situation and proposed the \u201carrangement\u201d to boost nickel trading volumes and profit from the difference in interest charged to UIL, compared with the smaller amount it paid to Citi bank for the same funds. \u00a0<\/p>\n

Economou repeatedly denied during the hearing that he knew of such an arrangement. He also denied Gupta\u2019s allegations that he was the one to propose it at a June 2019 meeting at a luxury Dubai hotel. \u00a0<\/p>\n

Hutton pressed Economou on whether he knew in 2019 that at least one of Gupta\u2019s businesses had recently fallen into insolvency. \u00a0<\/p>\n

It \u201cseems particularly surprising that you didn\u2019t know his businesses had gone into insolvency proceedings\u201d around the time that Economou and another Trafigura trader, Harshdeep Bhatia, were in talks with Gupta over expanding the volume of their business, she said. \u00a0<\/p>\n

Economou said: \u201cBy that time we were already doing business for two years\u2026 I was happy with the business because the performance up to that point was very good.\u201d\u00a0<\/p>\n

Hutton showed the court a document prepared by Gupta for Trafigura which showed volumes of goods trade soaring from 17,500 metric tonnes in 2017 to a peak of almost 70,000 metric tonnes in 2021. \u00a0<\/p>\n

\u201cThat\u2019s fairly surprising that dealings with a metal trading business with a chequered financial past produced that scale of business in two to three years,\u201d Hutton said. \u00a0<\/p>\n

\u201cIt was a very good and welcome increase considering it was LME-grade nickel, as we thought at the time,\u201d Economou responded. \u00a0<\/p>\n

Hutton continued: \u201cYou wanted to finance [the trades] because you thought you could make money even if it could not provide LME-grade nickel\u2026 at the [June 2019] meeting you proposed that deal and the details were put in place afterwards.\u201d\u00a0<\/p>\n

\u201cThat\u2019s absolutely not true,\u201d Economou responded. \u00a0<\/p>\n

The former nickel trading head departed Trafigura<\/a> in February 2023 in the aftermath of the fraud allegations.\u00a0<\/p>\n

This is a developing story and may be updated as the hearing continues. \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"The High Court trial of Trafigura v Gupta has entered its second week Trafigura\u2019s trade finance team raised…\n","protected":false},"author":2,"featured_media":150488,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,2791,85,46,91881,80242,91882,91883,91884,91885,91886],"class_list":{"0":"post-150487","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-commodities","10":"tag-il","11":"tag-israel","12":"tag-metals-mining","13":"tag-nickel","14":"tag-prateek-gupta","15":"tag-socrates-economou","16":"tag-stephen-jansma","17":"tag-thibaut-barthelme","18":"tag-trafigura"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/150487","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=150487"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/150487\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/150488"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=150487"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=150487"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=150487"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}