(Bloomberg) -- Commodity trading house Gerald Group said it paid almost $49 million for tin that turned out not to be tin.

Gerald Group made a provision of $37.3 million in its 2023 financial accounts after the deal to buy Brazilian tin went awry, according to a note in its 2022 accounts filed at the UK’s Companies House. The firm has started investigations and engaged parties to assist in recovering the funds. 

“Upon arrival at the final destination and final weigh and assays results, it was discovered that the counterparty failed to fulfill its contractual obligations to deliver tin concentrate,” Gerald Group said in the filing.

Bloomberg reported last year that the company was hit by a loss in its tin book, with several senior executives subsequently leaving the firm. Reuters reported last June that Gerald Group had bought cargoes that were supposed to contain tin concentrate in Brazil but turned out to be sand.

But it’s the first time that Gerald Group — one of the largest metals trading houses outside of a top tier of Trafigura Group and Glencore Plc — has acknowledged the fraud and put a number on the potential loss it faces.

Gerald Group didn’t respond to a request for comment. The company reported net profit of $50 million in 2022.

A string of scandals has shaken metals markets and ensnared a number of trading houses in incidents that reveal shortcomings in the oversight of shipments and warehouses. Trafigura is still in court over an alleged $500 million fraud in nickel, while last March bags of nickel owned by JPMorgan Chase & Co. were found to contain stones.

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