Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.

When German miners first discovered nickel in the 15th century, they named it

kupfer nickel or devil's copper, because while they thought it contained copper, they couldn't recover

any from it. They blamed their troubles on the devil, and since then, nickel has had the nickname

the Devil's Metal. Amongst commodity traders, it's had a history of devilish behavior too.

Last week, Traffiguro, one of the world's largest commodity trading firms,

announced a $577 million write-down, claiming that they had fallen victim to a systematic

fraud in the devil's metal. More surprisingly, though, to industry insiders was who they were

dealing with.

Pratee Gupta, a 43-year-old Indian businessman, with a checkered reputation who had been trading

with Traffigura since 2016. Traffigura discovered that shipments of nickel that they had purchased

from Gupta-linked companies contained no trace

of the valuable metal, leading them to launch legal action against Gupta and secure a $625

million freezing order against his business empire.

Court documents show that the alleged fraud drew in Citigroup who financed

the trades, Barclays where Gupta's companies held accounts that received Trafigura funds,

and that the scandal could reach even deeper into the world of commodities, as Trafigurists say

that they sold on potentially fake nickel cargoes in

11 trades worth almost $100 million.

The 25,000 tonnes of missing nickel is not a small amount.

It comes to more than 10% of the annual imports of China, the dominant global nickel consumer. The alleged fraud involved

trades in nickel, which was in transit during 2022, and allegedly involved all sorts

...