LAM Trade Finance Group II, a fund with a minority stake held by U.S. bank Jefferies, has successfully secured a freezing order from a London court against iron ore trader Radiant World and its founder, Pinkesh Nahar. This action comes amid increasing pressure on Radiant World due to concerns regarding the validity of invoices provided to its banks. The company has vehemently denied these allegations, which have nonetheless led some counterparties and lenders to halt or restrict business activities with them.
The freezing order, obtained on August 27 through a pre-action application with London's High Court, is considered a significant move by creditors against Radiant World. The fund's exposure to Radiant World, its founder, and another entity, Sapphire Minmetals Corp. (formerly part of Radiant World), is estimated by the Financial Times to be nearly $500 million, specifically up to $499 million. This figure significantly exceeds previous reports, which suggested Jefferies had trade-finance-related exposure of about $300 million to Radiant World through its Point Bonita fund.
This incident marks the second time the Point Bonita fund has faced issues related to alleged fraud this year, following its exposure to the bankrupt auto-parts maker First Brands Group. The freezing order in London also includes Sapphire Minmetals and its chair Rakesh Sethi. Despite the allegations, Radiant World continues to deny any wrongdoing, while Jefferies has declined to comment on the matter.
