US metals trader Kataman has alleged it has been the victim of metals fraud after a shipment it bought supposedly full of nickel was instead filled with steel waste.
Kataman has brought lawsuits against New Alloys Trading in both London, UK, and Singapore, in which it alleges that the 151.5t of nickel it purchased from New Alloys was not shipped, and instead, it only received worthless steel waste. Kataman paid $3.3m for the supposed London Metal Exchange-branded nickel.
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Whilst the nickel shipments were supposed to travel from Dubai, UAE, to Singapore in August 2022, the month it was purchased, it instead sat at the port until March 2023. In that period New Alloys and its shipping provider, Techies, had stopped responding to Kataman’s attempts to communicate.
In March, when Kataman had located the shipment, there was no nickel inside. “Each of the seven shipping containers contained 16 or 17 jumbo bags containing waste steel briquettes, which were virtually worthless,” Kataman stated in its Singapore lawsuit.
The same nickel that Kataman was supposed to receive from New Alloy is the nickel that it intended to sell to TMT Metals and Mine Craft. The intention was for them to pay interest to Kataman for it to buy and re-sell nickel cargoes from a nominated supplier. The nominated supplier was likely New Alloys.
New Alloys, TMT and Mine Craft all have alleged connections to businessman Prateek Gupta, whose fellow commodity trade Trafigura alleges was behind a similar case of nickel fraud that cost the trader $577m. TMT and Mine Craft are defendants in Trafigura’s suit.
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By GlobalDataA New Alloys representative said that the company only held a “general business relationship” with Gupta. A person close to Gupta also stated that TMT is challenging the London case, arguing that the UK is not the correct jurisdiction for the case to be tried. Gupta has denied any involvement in Mine Craft’s operations.
