Iron ore trader Radiant alleges Glencore hid their ties from audited records

Keystone / Urs Flueeler

Embattled iron ore trader Radiant World has alleged that Glencore sought to keep the “true nature” of their relationship out of its audited records, in a lawsuit that is seeking more than $2bn in damages from the Swiss commodities group.

Radiant alleged in a lawsuit filed in Singapore on Tuesday that Glencore’s “formal records did not fully reflect the parties’ private arrangements” or the “true nature and extent of the trading relationship”. It claims Glencore instead insisted on communications through in-person meetings and messages sent on WhatsApp.

“Glencore directed those channels so that the true commercial arrangements would not be reflected in its audited records,” according to the lawsuit. Radiant understood Glencore’s approach stemmed from increased regulatory scrutiny following investigations of the Swiss company by the US Department of Justice, the lawsuit added.

Radiant is joined in the Glencore lawsuit by partner companies including Sapphire Minmetals.

In response to questions from the FT, Glencore published a statement on its website saying: “These claims are meritless and we will contest them vigorously.”

Glencore said it had “evidence that these companies sent falsified invoices and contracts as well as fabricated emails, which they fraudulently claimed to have received from Glencore personnel, to a number of financial institutions.”

“We take these issues seriously and are conducting a review of our historic business activities” with the groups that are part of the lawsuit, it added.

The lawsuit marks an escalation in a dispute between Radiant, which has come under pressure in recent months over alleged inconsistencies in the documentation underpinning its trades, and Glencore, one of its biggest trading counterparties and financial backers.

Some banks and trading firms, including Glencore, have cut Radiant off due to concerns over alleged fake documents. Radiant has denied any wrongdoing.

In its lawsuit, Radiant linked the alleged attempts to conceal their relationship to the increased regulatory scrutiny of Glencore following its 2022 guilty pleas to multiple counts of bribery and market manipulation, which included $1.5bn in penalties. The DoJ settlement required the commodities group to retain independent compliance monitors to check its internal controls.  

“Glencore preferred oral communications and physical meetings every month including multiple meetings in Singapore,” according to the legal complaint.

“Glencore also directed that documentation recording the transactions entered into with the claimants be routed and prepared in non-standard ways, including the sending of documents to Glencore’s Delhi office,” it states.

Radiant has sought to portray Glencore as the dominant partner in their relationship, which helped fuel its unprecedented rise, and says the withdrawal of its support has substantially contributed to the trader’s current crisis.

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