Firm owned by tycoons Reuben Brothers sues Trafigura in nickel fraud - source

FILE PHOTO: Trafigura logo is pictured in the company entrance in Geneva·Reuters
Eric Onstad
2-min read

By Eric Onstad

LONDON (Reuters) - Hyphen Trading Ltd, owned by property and metals tycoons the Reuben brothers, has filed a legal claim against commodity trader Trafigura which a source close to the situation said was linked to an ongoing alleged nickel fraud case.

Trafigura booked a $590 million impairment earlier this month relating to what it alleges was "systematic fraud" by Indian businessman Prateek Gupta regarding nickel cargoes. Gupta's representatives have previously said they would provide a robust response to the allegations.

Britain's court website showed that London-based Hyphen Trading filed a claim with HM Courts & Tribunals on June 5 against Trafigura. No documents regarding that case were immediately available and no details were published as to the substance of the claim.

However, a source with direct knowledge of the matter said the claim was linked to the wider nickel fraud alleged by Trafigura, which earlier this year brought a case against Gupta in London's High Court.

That would suggest that the impact of the alleged fraud is widening to other metals players.

Trafigura declined to comment. Neither Hyphen Trading nor its owner Reuben Brothers responded to requests to comment.

Geneva-based Trafigura has said it began to suspect in October last year that around 25,000 tonnes of metal sold by Gupta's firms may not be high-grade nickel, and began inspecting more than 1,000 shipping containers.

Trafigura said it ended up inspecting 156 out of 1,104 containers by the time it filed court papers in February for a global freezing order on Gupta and his firms. None of the containers had contained nickel.

The commodity trader has said in court documents that it sold a small number of the cargoes to third parties, including to U.S. company Argentem Trade Services.

Trafigura received some of the payments for metals purchased by Argentem through Hyphen Trading, the documents said.

On its website, Hyphen said it specialises in metals and can provide finance to "small to mid-size traders who face difficulties accessing finance from the large trade finance banks".

Hyphen said on LinkedIn that it is part of the Reuben Brothers Group, and according to UK Companies House data Hyphen Trading is a wholly owned subsidiary of RB International UK.

(Reporting by Eric Onstad; Editing by Jan Harvey)