Singapore's police have initiated an investigation into Radiant World, an iron ore trader, after receiving reports concerning the company. This action by Singaporean authorities comes amidst existing US probes into the firm. No further details about the specific reports or the timeline of the inquiry have been made public yet.
Radiant World has been under increasing pressure due to concerns about allegedly falsified documents. Major commodity traders like Vitol Group and Cargill have reportedly ceased trading with the company, and creditors are re-evaluating their exposure. The US Justice Department is investigating transactions involving Radiant World, and the US Commodity Futures Trading Commission (CFTC) is examining trades linked to the company and its creditors. Additionally, the Financial Conduct Authority in the UK is monitoring developments and engaging with relevant firms regarding potential impacts on UK markets.
Despite the ongoing investigations, Radiant World has not been formally accused of wrongdoing, and such inquiries do not always lead to charges. The company previously stated it was unaware of any US investigations and has denied wrongdoing, asserting that it conducts business to the "highest commercial and legal standards." However, banks reportedly began contacting Radiant World's counterparties to verify invoices used for financing, with some being informed that underlying trades did not exist. For example, Intesa Sanpaolo SpA, which used Radiant World invoices for iron ore trades with Vitol Group to raise financing, was told by Vitol that some trades were non-existent, leading Intesa to take a provision on its exposure to Radiant World.
In response to these developments, Deutsche Bank AG and KBC Group NV have frozen funds in some of Radiant World's Singapore accounts, and several major iron ore miners and Chinese buyers have stopped doing business with the company. Commodities broker Marex Group has also frozen all of Radiant World's accounts. To address liquidity issues, Radiant World has been selling commodity inventories, including a large portion of its aluminum stock to STG, a trading company backed by principals of the US hedge fund Squarepoint. The company, founded by Pinkesh Nahar, trades over 80 million tonnes of iron ore annually, valued at more than $7.5 billion, and has recently laid off some operations staff across its global offices.
