Glencore Plc has set aside approximately $480 million to cover its exposure to Radiant World, an iron ore trader facing allegations of providing falsified documents to banks. This provision is intended to cover Glencore's entire outstanding net exposure to Radiant World. This move comes as several top commodity firms have reportedly cut ties with Radiant World due to concerns over its use of falsified documents to secure financing.
Radiant World is currently embroiled in multiple legal challenges regarding alleged fraud involving fake invoices. Incomlend Pte., an invoice financing platform, filed a lawsuit in Singapore's High Court, alleging that Radiant World used already-paid Glencore invoices, supported by fake contracts, to raise $31.7 million. Additionally, Jefferies Financial Group Inc. has accused Radiant World of falsifying iron ore invoices in a "fraudulent scheme" as part of a $500 million London court claim, leading to a worldwide freezing order against Radiant World and its founder.
Mizuho Bank also provided $100 million in credit to Radiant World in June, which was reportedly secured by invoices that a counterparty later stated were invalid. The mounting legal issues have led to significant staffing reductions at Radiant World, with almost half of its China and Singapore iron ore traders leaving, along with further departures from its London and Geneva offices. Sapphire Minmetals, another iron ore trader facing similar allegations, has also experienced job cuts in China and Singapore.
