Nickel Scam Suspect Prateek Gupta Testifies, Says He Doesn't Know Where $600 Million Went

Prateek Gupta, the man Trafigura Group says defrauded it of $600 million in a massive nickel scam, told a court on Thursday he didn’t know where much of that money has gone.

Gupta, testifying at a London trial for a second day, faced a series of questions about the whereabouts of the funds he received as part of the Trafigura financing. When asked whether he “lost hundreds of millions of dollars,” Gupta replied: “I don’t have an answer to that.”

Trafigura started doing business with Gupta in 2014, but ramped up trading to more than 69,000 tons of nickel, worth $1.2 billion, in 2021. Under an arrangement that Trafigura describes as “transit financing,” the trading house would buy cargoes of nickel from companies connected to Gupta as they were loaded on to a vessel. Once they reached their destination 90 to 180 days later, another Gupta-linked company would buy the cargo back for the same price.

By March of that year, Gupta’s firms were facing financial difficulties, according to his written defence. They would later fail to buy back cargoes of nickel sold to Trafigura as agreed. When eventually opened, those cargoes turned out to contain lesser value material and not nickel.

“Cash reserves were depleted and the multiplying effect of the Covid-19 pandemic-related issues began to catch up with us,” Gupta said in a separate filing.

Trafigura sued Gupta in London as it looks to recoup some of the losses it incurred. Gupta, who was speaking via videolink from Dubai, is giving evidence publicly for the first time about the events. He maintains Trafigura’s executives knew what was being shipped wasn’t nickel.

Trafigura has said it doesn’t believe that any of its employees were complicit in the alleged nickel fraud. Socrates Economou, formerly the head of Trafigura’s nickel trading book, has repeatedly denied he was party to an “arrangement” while testifying in London earlier this week.

“I’m suggesting to you that you at that point were resorting to shipping cheap metal to Trafigura, because you needed the cash to pay off other creditors in your business empire,” Nathan Pillow, Trafigura’s lawyer, said to Gupta on Thursday.

“That’s not correct,” Gupta said.