Indian businessman Prateek Gupta appeared at London’s High Court on Monday for a $600 million fraud involving fake nickel cargoes, while counter-claiming that Geneva-based commodities trader Trafigura devised the entire scheme.

The five-week trial marks the culmination of a scandal that erupted in November 2022 when Trafigura discovered shipping containers supposedly containing high-grade 99.8% pure nickel actually held carbon steel and worthless materials.

Trafigura alleges Gupta and his companies agreed to provide high-quality nickel but delivered low-value materials instead, operating what the trader describes as a fraudulent “Ponzi scheme.”

Trafigura’s lawyer Nathan Pillow told the court: “Trafigura paid for rubbish and was left with hundreds of millions of losses.” The company has recovered only about $10 m from trades worth more than $500 m, leaving it with metal “worth around 2 per cent of what we paid for it.”

Gupta accepts he did not deliver high-grade nickel but insists Trafigura staff devised the scheme to inflate the company’s standing in nickel trading. His lawyers argue the arrangement involved using financing from Citi to “make money ‘borrowing’ cheap money from Citi and ‘advancing’ it to Gupta and his companies at a higher interest rate.”

Court filings show Gupta alleges Trafigura’s former head of nickel trading, Sokratis Oikonomou, proposed the scheme in May 2019, wanting to expand to “a position of dominance in the market.”

Gupta’s lawyers argue that “so long as the circle kept turning,” all parties gained and “nobody suffered.” They claim the COVID-19 pandemic and Russia’s 2022 invasion of Ukraine sent nickel prices soaring, causing the scheme to unravel when Citi pushed for cargoes to be taken back.

Trafigura denies any such agreement existed, with its lawyers calling Gupta’s defence “a fiction conceived after the event by admitted fraudsters.”

The trial will hear evidence from Gupta and former senior Trafigura executives. Gupta remains subject to a freezing order on his assets, which he unsuccessfully challenged in December 2023.