Radiant World sues Glencore for $2 billion in Singapore

Radiant World and Sapphire Minmetals filed a $2 billion lawsuit against Glencore in Singapore on Tuesday, opening an aggressive new front in a sprawling dispute that has rocked the commodities trading world and drawn the attention of U.S. and Singaporean authorities.

"We have filed in the Singapore court against Glencore for $2 billion," Rakesh Sethi, chairman of Sapphire Minmetals, told Bloomberg News by phone. Sapphire Minmetals, which used to be part of Radiant World, is joining forces with the Singapore-based iron ore trader in the claim. The companies allege they suffered more than $2 billion in losses because of Glencore's actions.northernminer+2

Glencore Fires Back

Glencore dismissed the claims as "without merit" and said it would contest them vigorously. The Swiss commodities giant countered that it had confirmed evidence Radiant World and associated companies sent financial institutions falsified invoices, contracts and fabricated emails purporting to be from Glencore employees. In August, Glencore said it had stopped all business and exited all obligations with Radiant World, and has taken a provision of about $480 million against its exposure to the trader and related companies.reuters+1

Mounting Legal Pressure

The lawsuit comes as Radiant World faces a tightening web of legal and regulatory scrutiny. A London court has frozen up to $499 million in assets belonging to Radiant World and Sapphire Minmetals after a Jefferies ↘ 2.53%-managed fund accused them of using fake iron ore invoices in a scheme to defraud it. In Singapore, trade-finance platform Incomlend is seeking more than $34 million over allegedly invalid invoices used to secure financing, while a unit of Mizuho Financial Group ↘ 1.59% has sought an injunction after providing about $100 million in credit secured by invoices that Glencore said it did not recognize.moneyweb+3

The U.S. Department of Justice, the Commodity Futures Trading Commission and Singapore police are all investigating the trader. Singapore police raided Radiant World's office premises in August.northernminer+1

Staff Exodus

The pressure has triggered an exodus of personnel. Radiant World has lost almost half its iron ore traders in China and Singapore, while employees have also departed its London and Geneva offices. Among the departures is Leon Jin, a veteran trader who headed the company's iron ore business in China. Radiant World has denied wrongdoing and previously called allegations that it supplied invalid invoices "inaccurate and unsubstantiated".northernminer