Radiant World axes more jobs as legal pressure mounts

Radiant World and affiliated iron ore trader Sapphire Minmetals have cut additional jobs as legal troubles and financial strain intensify across Asia and Europe. Bloomberg reports that Radiant World has shed nearly half of its iron ore traders in China and Singapore, while also letting go of personnel from its London and Geneva offices. Some staff members were terminated, while others opted to resign.

Sapphire Minmetals has similarly reduced its workforce in China and Singapore. This retrenchment follows a $499 million worldwide freezing order issued by a London court at the request of a Jefferies Financial Group-managed fund, which accuses Radiant World and Sapphire Minmetals of falsifying iron ore invoices in a fraudulent scheme. Jefferies fund successfully secured a Singapore asset freeze against Radiant World.

Radiant World has previously denied any wrongdoing, asserting that it adheres to the highest commercial and legal standards. The dispute now threatens the once-prominent commodity trading business, with lenders, counterparties, and employees pulling out. Major trading firms such as Vitol Group, Cargill, and Glencore (LON: GLEN) have severed ties with Radiant World following concerns over allegedly falsified documents presented to lenders in July.

Legal challenges mount as Radiant World faces lawsuits in Singapore from trade-finance platform Incomlend and a unit of Japan’s Mizuho Financial Group, seeking over $34 million for allegedly fraudulent Glencore contracts. Authorities, including the US Department of Justice, US Commodity Futures Trading Commission, and Singapore police, are investigating the company, while Singapore authorities have raided its headquarters.

Glencore, a former major supporter of the group, has set aside $480 million in provisions related to its exposure to Radiant World. In return, Radiant World and Sapphire Minmetals claim they have suffered over $2 billion in losses due to Glencore’s actions. The latest rounds of layoffs include the departure of Leon Jin, a former trader who managed Radiant World’s iron ore business in China, and base metals traders Francois-Henri Audibert and Kelvin Li.

Despite these setbacks, Radiant World still maintains a metals unit, separate from the troubled iron ore division. Sapphire Minmetals has also cut two operational positions, one in Shanghai and another in Singapore, while retaining a small team of traders in Beijing to manage its remaining iron ore operations. As both companies are legally linked, they remain vulnerable to the freezing order as their trading activities dwindle.