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Embattled iron ore trader Radiant World is threatening legal action against Glencore, alleging that its larger rival is responsible for over $1.4bn of losses as part of a wider dispute between the two groups.
Singapore-based Radiant, which grew rapidly from relative obscurity to become one of the largest iron ore traders in the world, has been battling a liquidity squeeze in recent weeks.
Banks and trading firms including Glencore cut the group off over alleged inconsistencies in the documentation underpinning its trades. Japanese lender Mizuho — which was one of dozens of global banks that lent money to the business over the years — on Friday brought a legal challenge to Radiant World in Singapore’s Supreme Court.
Singapore’s police also confirmed to the FT that they were carrying out an investigation into Radiant — which is headquartered in the city state — after receiving complaints about the business.
Radiant, which has denied any wrongdoing, sent a legal letter to Glencore on Thursday seeking to recover more than $800mn that Radiant and another entity, Sapphire Minmetals, claim they had already paid to the Anglo-Swiss metals and mining group in recent years, as well as losses from “the destruction of the value” of its business.
“These claims are meritless and Glencore will vigorously contest them,” Glencore told the FT, adding that it “has incurred losses and been exposed to risks by Radiant’s actions and will take appropriate action”.
Glencore said this month that it had stopped doing business with Radiant and had taken a provision relating to its contracts with the trader.
Radiant’s letter describes a complex trading and financing relationship with the London-listed commodities trading giant stretching back years that came to a head in 2021, when Glencore allegedly decided to close out derivatives positions and demanded repayment of almost $1.2bn in exposure it said Radiant and Sapphire had racked up under the derivatives contract.
Radiant previously owned a stake in Sapphire but disposed of its shares in the group in 2015, according to Hong Kong corporate records. Radiant described Sapphire as a “separate legal entity” in its letter to Glencore, while Sapphire stated in response to a Bloomberg News article earlier this month that a “historical shareholding does not imply operational or financial co-relation today”.
Radiant has alleged that the parties reached an agreement over the derivatives exposure, which allowed them to gradually pay it down while Glencore assisted the Singapore-based trading firm in raising outside financing and investment.
In its letter, Radiant cited a WhatsApp message allegedly sent by senior Glencore executive Peter Hill in 2024 outlining the support it had offered the iron ore trader.
“Remember — we are the guys that you were allowed to build up $1.2bio [sic] exposure to and basically bank rolled your entire existence for the last few years,” Hill’s alleged WhatsApp message states. “So give me a break and relax, we will always support you as we have done and continue to do so.. we will do so to the extent it makes sense for us.”
Hill declined to comment.
Radiant also alleged that its relationship with Glencore went beyond that of a counterparty and described the commodities group as “a senior partner in the relationship”. It claims that Glencore reviewed and approved the qualifications of potential hires, advised the company on fundraising, and suggested the price at which it should enter into trades.
The letter also alleged that Glencore struck a deal under which it subscribed to a 4.995 per cent equity warrant in Radiant and subsequently communicated that it would “assist in bringing hedge funds and other investors” to finance the group. Glencore allegedly forecast that Radiant’s valuation could reach around $5bn through this additional investment.
Radiant claimed that Glencore recently served a termination notice to the Singapore firm and Sapphire, alleging that they owed the London-listed group $951mn, set off against $471mn that Glencore owed back to the two firms.
“The exposure on our books [to Radiant] is not material and well below our threshold of $500mn,” Glencore said earlier this month. That figure takes into account the provisions Glencore has already booked.
A person familiar with the matter said that Glencore’s net exposure to Radiant had always been under $1bn, and on average over the past decade Radiant had accounted for less than 10 per cent of Glencore’s iron ore business in volume terms.
