Trafigura could lose more than a half billion dollars after being hit with what it described as a containerised nickel fraud scheme.
The Swiss commodities trading giant said on Thursday that it had set aside $577m in the first half to offset the potential losses while suing UD Trading Group, TMT Metals and Prateek Gupta.
“The fraud concerns containerised nickel in transit during 2022 and involved misrepresentation and presentation of a variety of false documentation,” Trafigura said in a statement.
“The fraud is isolated to one specific line of business. We have seen no evidence to suggest that anyone at Trafigura was involved or complicit in this illegal activity”
The company — which recorded a total profit of $7bn last year and $2.7bn in the first half — said it began inspecting the containers upon delivery and found none contained nickel.
Trafigura said the majority remain in transit and are awaiting further inspection.
The trading giant believes the 2023 first half profits will exceed its 2022 first half profits, notwithstanding the $577m impairment charge.
“The group remains committed to building its presence in the fast-growing battery metals markets,” Trafigura said.
Despite the company's insistence no one at the firm was involved in the alleged fraud, Bloomberg reported its head of nickel and cobalt trading Socrates Economou was leaving the company.
TMT Metals has been approached for comment. UD Trading Group’s website appears to be down.
UD Trading appears to be a low-profile company. It was described in a 2015 report by Reuters as a family-owned outfit based in Singapore, with Gupta the third generation of his family to run the company.
