Trafigura has accused the wife of metals trader Prateek Gupta of hiding and selling assets it believes may have been derived from her husband’s US$600mn nickel fraud against the commodity trading giant.
Ginni Gupta sold a Dubai villa last year as part of a transaction that Trafigura believes was designed to use undisclosed assets received from her husband to fund legal fees, the trader told a Dubai court hearing today, accusing her of perpetrating a “deliberate fraud” upon the court.
Earlier this year, a London court found Mr Gupta carried out a years-long fraud on Trafigura, involving buy-back sales of cargoes of purported high-grade nickel, which in reality were largely worthless materials.
Trafigura’s efforts in Dubai to date are an effort to locate and secure assets it believes it will be entitled to seize when it enforces the English fraud judgment. It has said its total damages, including interest, amount to just over US$700mn.
The trader won a freezing order against Mrs Gupta in the Dubai International Financial Centre Courts last year after arguing she held assets that Trafigura could use to enforce the London judgment.
The company is now seeking to strengthen the freezing order and for the court to require Mrs Gupta to provide further information about the funding of her legal fees, according to its written submissions.
Mrs Gupta, in turn, alleges Trafigura’s legal manoeuvres in Dubai to date have been “erroneous” and “abusive”. She has made an application to discharge the freezing order because Trafigura allegedly failed to fully disclose information to the judge when it won the order.
Trafigura told the court today that earlier this year, Mrs Gupta sold a villa in Dubai as part of a US$6mn settlement with a trading counterparty, Sharp Trend Technology Limited. The funds were sent to Al Noor, a company described by Mrs Gupta as a debt collection agency used by Sharp Trend.
However, Trafigura alleged Al Noor is in fact a commercial entity associated with Nomas Global Investments LLC-SPC, the company funding both Guptas’ legal fees.
Trafigura has previously asserted that Nomas is controlled by a member of the Abu Dhabi royal family, Sheikh Mohammed Bin Sultan Bin Al Nahyan, and questioned why the company would fund litigation in which the defendants would not be awarded any damages even if they won.
“It looks thoroughly uncommercial,” Peters told the court. “And we now find it [Nomas] doing business with the company that received assets from the villa sale.”
Trafigura also told the court Mrs Gupta has not adequately explained how a company in which she is a shareholder, Vision Investments Limited, was able to acquire assets worth tens of millions of dollars, including an indirect stake in Mauritius’ Silver Bank.
The trader’s barrister, David Peters, told the court that Vision Investments reported metals trading volumes of US$145mn in 2018 and US$221mn the following year without, according to its own accounts, having a bank account.
The company alleges the “natural inference” from information available to it “is that [Mr Gupta]’s business activities (including his fraudulent activities) were generating substantial assets, which were then carefully placed in [Mrs Gupta]’s name in an attempt to insulate them” from creditors.
Mrs Gupta claimed to have received “substantial gifts” from her family. But Trafigura claimed she has not provided evidence of the type or value of those gifts.
In response to Trafigura’s arguments, Mrs Gupta’s barrister Andrew Trotter claimed Trafigura had “obtained coercive orders on an erroneous basis, and abused the processes of those courts to inflict crippling consequences on Mrs Gupta” in an attempt to block the sale of the villa through the local Dubai courts.
He said in a written submission that Trafigura had failed to make full and proper disclosure to the court when seeking those orders and as a result had “tied up all of her assets; emptied her bank account; without ever establishing before any court a proper basis to do so”.
Her barrister Andrew Trotter asked the judge to discharge the freezing order because of the alleged disclosure breaches, which he said resulted in Trafigura seeking to obtain an arrest warrant for Mrs Gupta in the local Dubai courts.
As a result, Trotter said in a written submission, Mrs Gupta’s bank account reached a negative balance of almost Dh2.3bn (US$625mn).
The hearing is set to conclude on June 19.
