Lawyers for Prateek Gupta this week urged a London court to find that two senior Trafigura metals traders colluded to further a fraudulent nickel trading scheme that ultimately lost the company some US$600mn.
Gupta’s lawyers mounted their defence this week at the conclusion of a three-week trial over Trafigura’s allegations that he masterminded a scheme in which high-grade nickel was substituted for relatively worthless materials.
The businessman does not deny that the cargoes did not contain nickel, but is seeking to fend off the suit by alleging that Trafigura was a knowing participant in the scheme.
Ex-Trafigura nickel trading head Socrates Economou and India-based trader Harshdeep Bhatia “worked to keep the trading with the defendants going despite the presence of a litany of red flags”, Gupta’s lawyers said in a written submission to the court.
The alleged red flags include a lack of cargo inspections, the absence of certificates of analysis, long voyage times, and inaccurate HS codes.
Concerns about the trading activity – which generally involved Trafigura purchasing cargoes and selling them back at a profit – were also raised by Trafigura’s own trade finance and operations teams, the trial previously heard.
Gupta’s barrister, Louise Hutton, asked the judge to find that the only explanation for red flags being ignored was that Economou and Bhatia knew the trading was fraudulent, and worked to quell concerns within Trafigura in order to continue the alleged scheme.
“It left everyone winning until the plates stopped spinning” in late 2022, when the first cargo was inspected and found not to contain nickel, Hutton told the court.
She said Economou did not appear surprised when the inspections revealed the possibility of a vast fraud against Trafigura.
“He doesn’t have a coherent account of when and how he learned of the fraud and has failed to advance a credible account of that,” she said.
Economou denied, in testimony to the court last month, that any fraudulent arrangement existed between himself, Bhatia and Gupta.
Bhatia declined to give evidence at trial. Gupta’s lawyers have previously said the judge should infer from the decision that he and Trafigura were trying to avoid testing of his evidence.
At least US$3.2bn traded hands over the course of Trafigura and Gupta’s relationship. For at least the first year, the cargoes did contain high-grade nickel, Trafigura previously told the court.
Before Gupta’s representatives put forward their case, lawyers for Trafigura told the court that the defence was misrepresenting evidence, such as emails and WhatsApp messages.
Lead barrister Nathan Pillow said most of the alleged red flags were in fact evidence of Economou and Bhatia’s – and therefore Trafigura’s – lack of knowledge that anything was amiss in the nickel trading.
“They take a true thing and they twist it,” Pillow said of Gupta’s lawyers.
“Not only has the trial established that the [alleged fraudulent arrangement] did not exist, but at a bare minimum it has made untenable any sensible case that knowledge of the [arrangement] could be attributed to [Trafigura],” the trader’s lawyers said in a written submission.
Judge Pushpinder Saini said he expected to deliver a judgment by the end of January 2026.
