Mizuho $100M Credit to Radiant World Secured by Allegedly Invalid Invoices: Documents

Mizuho Bank provided some $100 million in credit to Radiant World in June which was secured by invoices that a counterparty to the iron ore trader later said were invalid, according to documents and a source with direct knowledge of the matter.

Radiant World did not respond to Reuters requests for comment on Friday.

Details of the credit provided by Mizuho, the banking arm of Japan’s Mizuho Financial Group, have not previously been reported.

A Mizuho spokesperson said it had no comment.

The Mizuho financing was secured against invoices which purported to be for Radiant World iron ore sales to Glencore, correspondence seen by Reuters shows. However, Glencore told Mizuho in early August that it did not recognize the invoices, the documents show.

Glencore, which had been a major counterparty to Radiant World, said in early August it had booked a provision on its exposure to it and on Friday said it had “stopped all business and exited all obligations” with the company.

“Glencore has incurred losses and been exposed to risks by Radiant’s actions and will take appropriate action,” a Glencore spokesperson said, without elaborating.

Radiant World said in a July 31 statement that allegations it supplied invalid invoices to raise funding were “inaccurate and unsubstantiated” and it continued to operate normally.

Singapore’s police force said last month that it was investigating Radiant World after receiving reports about the company, without giving further details.

Little-known beyond commodity markets, the company founded by Pinkesh Nahar in 2003 has risen to become one of the world’s largest iron ore traders.

Radiant World says it traded more than 80 million metric tons of the steel raw material last year.

(Reporting by Solomon Cefai; additional reporting by Pratima Desai in London; editing by Tony Munroe and Alexander Smith)