Singapore judge raises doubts iron ore trader Radiant World is owed US$1 billion

A SINGAPORE judge has cast doubt on trader Radiant World’s claim that it is owed more than US$1 billion from customers, citing concerns over an alleged “pattern of fraudulent conduct,” according to a court filing.

Radiant World, battling demands from creditors, was placed under interim judicial management on Thursday (Sep 24), when the High Court appointed KPMG restructuring executives to take charge of the business.

The decision, granting an application by Mizuho Bank, opens a new chapter in a saga that has gripped the global commodities industry.

In the ruling, Judge Kristy Tan concluded the company was or was likely to become unable to pay its debts, according to a signed copy seen by Bloomberg. Tan added in the document that she placed “little weight” on the company’s claims it is owed US$1 billion in trade receivables – currently, the lion’s share of its assets.

“There is an urgent need for interim judicial managers to investigate the Company’s affairs in the light of the prima facie pattern of fraudulent conduct on the part of the Company’s management,” Tan wrote. “This is a case where a management time-out may actually serve to enhance and prevent the running down of the Company’s assets and business.”

Radiant World has denied all wrongdoing. A spokesman did not immediately respond to requests for comment on Friday (Sep 25). Mizuho also did not immediately respond to Bloomberg queries. Mizuho’s lawyers from Shook Lin & Bok declined to comment. 

A Bloomberg analysis of corporate records and visits to counterparties’ registered addresses had suggested that the vast majority was due from companies that said they owed Radiant nothing, firms closely related to Radiant itself, or obscure entities in the Middle East.

Tan pointed to over US$210 million in Radiant World said it was owed by Aspira Co, Sapphire Minmetals Corporation and Quanterra International – companies which she noted were related to Radiant World itself, raising questions “as to how accurate or realisable these assets may be.” 

The judge also rejected the company’s argument that a claim against Glencore for about US$2 billion should be regarded as a “realisable asset”.

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“It is pure speculation as to how the claim will fare and that it will be ‘resolved within 12 months,’” she wrote.

Glencore has said that the claim against it is “meritless”. BLOOMBERG