Indian businessman Prateek Gupta claims Trafigura traders dreamed up a $590m nickel shipping fraud, which is set to end in a huge court battle.
The Financial Times cited UK High Court filings made by Gupta as accusing the trading giant of “devising and proposing” the scheme.
The defence documents allege that certain Trafigura employees suggested trading other materials that would be passed off to the commodity trader’s lender Citibank as more expensive nickel.
Trafigura issued a worldwide freezing order on Gupta in February and said it was the victim of a “systematic fraud” by him.
More than 1,000 containers were found to hold lower-value materials.
Trafigura said in a statement that it “does not consider the defence to be credible and will vigorously continue to pursue its claim”.
The fraud has opened up Trafigura to a separate legal action by a company owned by billionaire shipowners the Reuben Brothers.
Last October, Citibank cancelled a $850m credit line to Trafigura that was being used to finance the nickel shipments as doubts grew over the trades.
Citibank is not commenting.
Publicity-shy UK-based Simon and David Reuben have two case proceedings against Trafigura relating to missing shipments on a number of vessels.
The Reubens run Reuben Brothers, which controls bulkers and a huge property empire.
Their Hyphen Trading company has launched the legal action.
Competing claims
The first case, in Singapore, relates to Hyphen’s purchase of a little over $10m of nickel from the London Metal Exchange.
This was loaded onto several ships.
But Trafigura’s lawyers told Hyphen the trading house was the rightful owner of the cargo instead.
Both companies claim to have the original bills of lading.
The other case at the UK High Court focuses on a 404-tonne cargo that Hyphen bought from Trafigura in September last year for $8.4m.
The cargo was loaded in Kaohsiung, Taiwan, onto the Cosco-owned, Orient Overseas Container Line’s 4,578-teu container ship OOCL Jakarta (built 2010).
Hyphen aimed to take delivery of the cargo when it arrived in Rotterdam.
The containers arrived in Rotterdam in mid-November on a different ship, but Hyphen was not told.
The boxes remained on the ship for its return trip to Asia, before they were finally unloaded in Jeddah, Saudi Arabia, according to the court filing.
Trafigura has continually insisted that none of its employees were complicit in the alleged fraud.
Hyphen is seeking the $8.4m, plus costs and interest from Trafigura.
