Broker Sucden writes down debt linked to alleged Trafigura fraudster

By Eric Onstad

LONDON (Reuters) - Commodity broker Sucden Financial Ltd (SFL) said it has written down a bad debt from TMT Metals, a firm that has been linked to businessman Prateek Gupta, whom global trader Trafigura has accused of fraud of over half a billion dollars.

"SFL is interested in the Trafigura court case, as it does have a claim for money owed by TMT Metals," the broker told Reuters in an email.

TMT Metals did not reply to a request for comment.

Trafigura said in February it had booked a $577 million charge relating to what it alleges is "systematic fraud" by Gupta's companies regarding nickel cargoes and obtained freezing orders on assets of Gupta, his wife and related companies.

Gupta's representatives have said they are preparing "a robust response" to the fraud allegations. A spokesman had no further comment on Monday.

A London judge granted SFL access to court documents filed by Trafigura, according to a court document dated May 11 and seen by Reuters on Monday.

SFL did not specify the amount of the TMT bad debt, saying it was included in overall bad debts in its 2022 accounts. Those accounts show "6.5 million pounds ($8.20 million) for possible impairment in the value of trading debtors".

The broker said its bad debt was "100% written down" and it has no other exposure to TMT, adding that it had not decided how to proceed with any claim.

Trafigura said in February when first announcing the alleged fraud that it was committed by "a group of companies connected to and apparently controlled by Mr Prateek Gupta including TMT Metals and companies owned by UD Trading Group".

A London court has set a deadline of June 2 for Gupta's lawyers to file an application to remove the freezing order on him.

SFL, one of eight members of the London Metal Exchange that is allowed to trade in the open-outcry trading floor, last week posted flat pre-tax profits of 18.4 million pounds in 2022 versus 18.3 million the year before.

($1 = 0.7923 pounds)

(Reporting by Eric Onstad; editing by Barbara Lewis)