London Court Awards Trafigura $700 Million in Nickel Fraud Case Against Indian Tycoon

London’s High Court awarded commodities giant Trafigura approximately $700 million in damages after finding Indian businessman Prateek Gupta orchestrated a systematic fraud involving fake nickel shipments, marking one of the largest judgments in recent commodities litigation history.

According to Global Trade Review, Judge Pushpinder Saini ruled on January 30, 2026, that Public Eye described as a verdict finding “Fraud on a grand scale” against Trafigura. The Swiss-based trader had discovered in late 2022 that containers purportedly holding high-grade Nickel instead contained worthless scrap metal, steel briquettes, and aluminum—material worth roughly 2% of what Trafigura paid.

Anatomy of a Ponzi-Style Scheme

The fraud operated through a complex “transit finance” structure spanning 2018 to 2022. Mining.com reported Trafigura would purchase nickel from Gupta’s companies—including TMT Metals and UIL entities across Singapore, Malaysia, and the UK—with agreements that the metal would later be repurchased by Gupta’s firms or sold to third parties. Trafigura earned a fixed fee equivalent to 4-6% annual interest, financed initially through an $850 million credit line from Citigroup.

According to Insurance Journal, the scheme involved over 500 trades valued at $3.3 billion. Trafigura’s lawyer Nathan Pillow described it as “a sort of Ponzi scheme” where the fraud continued “so long as the music continued to play.” The unraveling began when Citigroup grew suspicious of unusually long shipping times and massive transaction sizes—enough to fill over half an industrial container ship—and demanded inspections in November 2022.

Defense Collapses Under Scrutiny

Gupta mounted an unconventional defense, claiming senior Trafigura traders—including former head of nickel trading Sokratis Oikonomou and India-based trader Harshdeep Bhatia—devised the scheme at a 2019 Dubai meeting and that he was merely following instructions. According to Insurance Journal, Gupta argued the arrangement allowed Trafigura to inflate its nickel market position while profiting from interest rate differentials.

Judge Saini rejected this entirely. “By the end of his evidence, I had concluded that I could not rely on his oral or written evidence in respect of any of the material issues I need to decide,” the judge stated, according to Mining.com. The ruling found Trafigura’s former employees, including Oikonomou, were “wholly innocent of any wrongdoing” and were themselves “in a sense victims of Mr. Gupta’s fraud.”

The judgment noted Gupta “was prepared to fake serious illness” to delay proceedings and buy time, speaking from Dubai via video link where he repeatedly answered questions with non-committal responses like “potentially” when pressed on key facts.

A Pattern of Indian Fraud

The case exposes deeper vulnerabilities in India’s Commodities sector and banking system. Moneylife reported that Gupta was already under investigation by India’s Central Bureau of Investigation (CBI) for alleged bank fraud involving his company Ushdev International, which owed over Rs 3,500 crore ($420 million) to State Bank of India and other lenders when it was declared bankrupt in 2017.

During the London trial, Insurance Journal reported Trafigura’s lawyers cited two previous fraud cases involving Gupta’s companies where nickel was substituted for low-value metals. Other commodities traders including Gunvor Group and Trade Finance fund TransAsia Private Capital had previously lost money dealing with his firms, according to public filings.

Enforcement Challenges Ahead

Winning the judgment is one thing; collecting is another. According to Bloomberg, Trafigura “is yet to receive a penny” despite the January verdict. On February 26, the court slashed Gupta’s monthly living allowance from £20,000 ($27,100) to £5,000 as Trafigura intensifies recovery efforts. A worldwide asset freeze imposed in February 2023 remains in effect, though Gupta has struggled to pay legal fees and lost multiple sets of lawyers.

Global Trade Review reported Gupta’s legal defense was funded by UAE-based companies potentially linked to an Abu Dhabi royal family member—a highly unusual arrangement that Trafigura’s lawyers called “commercially odd” since litigation funders typically back claimants, not defendants. Judge Saini denied Gupta’s application to appeal.

What to Watch

The judgment’s real-world impact will depend on Trafigura’s ability to trace and recover assets. The next phase involves forensic pursuit of funds that flowed from Trafigura to Gupta’s web of companies across multiple jurisdictions. With Gupta based in Dubai and companies registered in Singapore, Malaysia, Switzerland, and the UK, enforcement will test Cross-Border legal cooperation.

For India’s commodities sector, the case serves as a stark warning. Multiple public sector banks extended billions to Gupta despite warning signs, raising questions about lending controls that echo broader concerns about Indian bank exposure to corporate fraud. The CBI investigation into Ushdev International continues, though Moneylife notes that substantive findings typically emerge from foreign court proceedings rather than domestic investigations.

The metals trading industry faces a reckoning over controls and counterparty vetting. Citigroup’s $850 million credit line supporting the scheme—and its eventual withdrawal that triggered the discovery—highlights how major banks can inadvertently finance fraud through transit finance structures. The case has already prompted Trafigura to restructure its metals division and strengthen internal oversight.

Watch for potential claims from other parties burned by the fake nickel. Property tycoons Reuben Brothers are pursuing separate litigation after purchasing affected cargoes. Any recoveries from the global asset freeze may face competing claims from Indian banks, Trafigura, and other creditors—setting up a complex international insolvency battle that could take years to resolve.