UK company Hyphen Trading Ltd hit a snag in early 2023 when it tried to locate a consignment of nickel it had bought from global commodity trader Trafigura. OOCL, the shipping line that carried the cargo, said the bill of lading presented by Hyphen was not authentic.
OOCL’s lawyers later told Hyphen, according to court records, that the document was a “fraudulent duplicate” created by Singapore company Techies Logistics (S) Pte Ltd.
In January, as part of a high-profile judgment in favour of Trafigura, a London court found that Techies was involved in three cases where duplicate or fraudulent bills of lading were issued, and that the shipping agent was acting on the instructions of Indian businessman Prateek Gupta.
“I find that on each of these cases, the UIL [Gupta] companies were able to perpetrate their fraud because of the involvement of Techies Logistics (S) Pte Ltd (‘Techies’), UIL’s Singapore agents and freight forwarders… They are the common thread in other claims involving duplicate BLs. It cannot be a coincidence,” Judge Pushpinder Saini wrote.
The findings underscore the longstanding fraud risks posed by small freight intermediaries in trade finance transactions. While almost all operate above board, according to experts, their small size can make them vulnerable to pressure from large customers.
Techies has not publicly responded to the judge’s finding and did not respond to emails from GTR requesting comment, or return phone calls to its Singapore office.
The company’s name surfaced several times throughout the weeks-long trial of Trafigura’s fraud claims against Gupta last year.
“There are a number of trades where duplicate bills of lading have been issued and where the common thread is the involvement of the defendants and their shipping agent, Techies,” a Trafigura lawyer told the judge early in the trial.
The court found that Gupta had perpetrated a fraud worth at least US$500mn, largely consisting of selling nickel cargoes that in fact contained other, much less valuable material. But from the end of 2022, the trial heard, Gupta’s companies began issuing several bills of lading that were later deemed fraudulent – all procured by Techies.
The duplicates left Trafigura in several tangles with companies to which it had sold the purported nickel, or that possessed bills of lading for the same cargo.
In February 2023, Trafigura attempted to take delivery of a cargo of nickel it had bought from UIL Malaysia. It presented the bills of lading provided by UIL to the shipping line Maersk, only to discover that another company, Yancoal, also possessed bills of lading for the same goods.
“Basically [Trafigura] and Yancoal said ‘we’ve both got the true bills of lading, give us the cargo’”, Edward Ho, a lawyer for Trafigura, told the court last November.
Trafigura declined to comment for this story.
The competing claims triggered a dispute between all three parties. A jointly commissioned investigation found Techies had issued a duplicate set of bills of lading for the cargo without Maersk’s authorisation. In addition, the cargo at the centre of the dispute transpired upon inspection to be not nickel at all, but stainless steel worth around US$230,000 – less than half the amount in demurrage and storage costs claimed by Maersk.
A spokesperson for Yancoal, an Australian mining company, said the dispute related to Yancoal International Trading, a related firm. The parent of both, Yankuang Energy Group, did not respond to an emailed request for comment.
In a third instance, Trafigura India claims duplicate bills of lading were issued to Hyphen for a cargo it bought from UIL Malaysia. The allegation will be aired in further legal proceedings and is also subject to a legal dispute in Singapore, according to the judgment.
During the trial, Gupta repeatedly denied knowledge of whether Techies issued duplicate bills of lading on his companies’ orders. Barrister Nathan Pillow suggested to Gupta that he and his business associate were driven to carry out “this kind of scam because you had completely run out of money” by the end of 2022.
“I don’t agree,” Gupta responded.
Gupta could not be reached for comment. He no longer employs the law firm that represented him in the trial and he did not immediately respond to a request for comment sent to lawyers that represent him in separate cases.
Judge Saini found that “absent any other explanation, the obvious inference in the [Hyphen] trades is that [UIL Malaysia] (via Techies) procured the issuing to Trafigura of duplicate BLs, and did so at the direction of Mr Gupta. Mr Gupta has provided no explanation for how this came to happen in all of these trades concerning entities he controlled.”
Allegations against one of Gupta’s companies involving Techies had also emerged before the trial. Kataman Metals, a US company, sued one of Gupta’s firms and Techies in Singapore in 2023, alleging it was sold nickel that turned out to be something else, Reuters reported at the time. Techies reportedly responded that it had no knowledge of what was in the containers. Kataman did not respond when GTR asked if the case has been resolved.
It is unclear if Techies is still in business. Its Singapore entity lists an Irene Chang Yii Ling as sole director, who did not respond to requests for comment.
Techies is a member of WCAworld, an international network of freight forwarders, according to the latter’s website. Asked whether Techies will remain a member in light of the court’s finding, a spokesperson for the association said: “We will be reviewing the judgment and decide on appropriate action after said review. WCAworld stands against any type of fraud or false documentation by its membership and in the industry in general.”
Fraud ‘will continue’
Techies belongs to a category of logistics firms known as non-vessel operating common carriers (NVOCCs), according to David Cuckney, assistant director of the International Maritime Bureau (IMB), which analyses bills of lading and other documents for banks.
Although the vast majority of NVOCCs operate legitimately, they have cropped up in trade finance frauds for decades, Cuckney said. He estimates that over 90% of bills of lading for containerised cargoes analysed by the IMB that turn out to be suspect come from NVOCCs or are house bills of lading
“Any legitimate logistics company will know that you do not issue duplicate bills of lading, because the last thing you want is to get the cargo to the other end and have two people trying to take delivery of it, because you know someone will then file a mis-delivery claim,” Cuckney said.
NVOCCs, which are often very small companies, can be more susceptible to pressure from their customers if they rely on a small number for their business.
Jonas Rey, founder of Athena Intelligence, which has investigated suspected fraud for trade finance lenders, said he had previously spoken to an NVOCC that justified issuing a duplicate bill of lading “because they had good relationship with their customer and they had asked a favour”.
He said banks and other counterparties should “beware of the obscure NVOCC that you suddenly see on multiple trades or that you only see with that one trader”. Previous trade finance frauds, such as that committed by Balli Steel, included a shipping company that appeared to be at arm’s length, but was in fact controlled by the trader.
In an attempt to create a trusted network of NVOCCs, the IMB launched a registry in 2019 that included committing to a code of conduct and standards for bill of lading issuance. Cuckney said sign-ups had been “slow but steady”.
WCAworld maintains a “blacklist” of logistics companies, which its website says was created “to improve the confidence and security of the independent freight forwarding industry”. It currently contains 327 entries. The spokesperson did not answer questions about the criteria for inclusion.
Few jurisdictions explicitly regulate the sector, with the US’ Federal Maritime Commission a notable exception.
“The reality is also that few NVOCCs have been punished for issuing multiple BL or documents,” Rey said. “That is part of the problem. We’re already having massive difficulties to get the main perpetrators to face justice, so the accomplices are not getting the attention they deserve.”
Fraud by unscrupulous NVOCCs “will continue”, said Cuckney. “It’s really the business environment that they’re in.”
