Trafigura Ex-Trader Denies Role in $600m Nickel Fraud

A former head nickel trader at Trafigura, a global commodities trading company that connects producers and consumers of metals, minerals, oil, gas, and power, denied allegations of fraud, as reported by Reuters.

The report claims that the trader was accused by Indian businessman Prateek Gupta in a London trial that he helped devise a $600 million fraud to swap expensive metals for cheap or even completely worthless ones. 

How Did The Alleged Fraud Work?

Trafigura, based in Geneva, originally sued Gupta over two years earlier, claiming that he was the mastermind of a fraud in which he and his companies agreed to provide high-quality 99.8% pure nickel, only to deliver steel or scrap instead.

However, according to Gupta, who is based in Dubai, this is all a part of a scheme devised by Trafigura’s own staff, which came up with complex transactions that would appear to inflate its standing in nickel trading.

Sokratis Oikonomou, who became head of nickel trading at Trafigura back in 2017, claimed in a written witness statement to the London High Court that he did not devise, know of, or participate in any such arrangement, referring to the alleged scheme.

“I am insulted by the suggestion that I would sacrifice my integrity and jeopardise my career to devise and propose such a plan,” Oikonomou noted. 

However, the Reuters report noted that Trafigura terminated his employment in January 2023, after he spent 16 years with the firm.

Later that year, in December 2023, Gupta and his lawyers presented chat exchanges and emails with Trafigura staff that he claims are proof that he was not alone in the operation. Trafigura itself previously said that it investigated the claims and looked into its staff’s affairs, seeking to determine whether they colluded with Gupta, which the staff members denied, and the company was satisfied with the outcome.

But, Gupta said that Oikonomou proposed in May 2019 to boost nickel trading between Trafigura and Gupta’s companies to 50,000 metric tons per year. However, Gupta said that there was not enough high-grade nickel, which is why he proposed the inclusion of alloys and scrap. 

Gupta also said that Oikonomou decided not to trade low-grade nickel in the open, as Citi – Trafigura’s bank – would only finance the high-grade variant. Citi itself did not comment on the case, but Gupta said that Oikonomou proposed a traisit financing operation, where some of the companies that Gupta owned or used would sell nickel to Trafigura and other Gupta-associated firms would buy them back after they reached the ports.

Trafigura responded by acknowledging that the two parties operated a transit financing operation, but it denied claims that this was devised to trade low-grade nickel or cheap metals.