Deutsche Bank AG and KBC Group NV have frozen accounts linked to Radiant World in Singapore, holding up tens of millions of dollars. This action follows reports that major commodity trading houses like Vitol Group, Cargill Inc., and Glencore Plc have either stopped trading or paused new deals with Radiant World due to concerns about invalid invoices and other documents. The freezing of funds adds further pressure to Radiant World, a company that rapidly grew to become one of the world's largest iron ore traders.
The development comes amidst increasing scrutiny of Radiant World's financing practices. Intesa Sanpaolo, an Italian bank, disclosed an exposure of approximately €200 million to Radiant World, largely covered by provisions, after discovering that some invoices used by Radiant World for financing were reportedly invalid when checked with Vitol. Similarly, Jefferies Financial Group's Point Bonita Capital fund is reviewing its exposure, which is now less than $300 million, to Radiant World, having found discrepancies in paperwork after suffering previous losses related to alleged fraud at First Brands Group.
Radiant World, owned by Pinkesh Nahar, has denied all allegations of fraudulent trading, stating its relationships are "healthy and uninterrupted" and that no concerns have been raised by its lenders. The company's legal representatives maintain that any suggestion of fabricated trading records to secure lending is false. Despite these denials, the actions by banks and trading houses indicate a widespread loss of confidence in Radiant World's operations, highlighting the potential risks in the trade finance sector, which has seen numerous blow-ups in recent years.
