Obscure UAE Firms Hold Key to Radiant’s $1 Billion in Assets

As creditors, counterparties and lawyers pore over the business of embattled commodity trader Radiant World, a low-rise office building in the emirate of Ajman, just north of Dubai, may contain one key piece of the puzzle.

Milla Sky Trading, whose registered address is in a shared office space in the building over the road from warehouses serving the Ajman freezone, owes Radiant World $76 million, according to a document Radiant World filed in court.

There’s just one problem: Milla Sky stopped trading a year ago, its registered representative Hassan Ahmad Shihan told Bloomberg News. And he’s never heard of Radiant World or any debt owed to it, he said.

Four companies that appear to be United Arab Emirates entities collectively owe Radiant World $329 million, according to the Radiant World document: Milla Sky, Thinkertech General Trading, Fly Horse General Trading and Bigbubble General Trading. Bloomberg attempted to contact each of them by phone, email and by visiting their offices, but — with the exception of Milla Sky — received no response and was unable to locate any employees at their addresses.

Radiant World’s balance sheet shows $1.007 billion in trade receivables — money that it says it’s owed by customers. However, a Bloomberg analysis suggests that the vast majority of the total is due from companies that say they don’t owe Radiant anything, trading firms that are closely related to Radiant World itself, or a series of obscure entities in the Middle East.

In response to questions for this story, a spokesperson for Radiant World sent Bloomberg screenshots of emails to Radiant World that appeared to be from each of Fly Horse, Bigbubble and Milla Sky, confirming their debt as it is outlined in Radiant World’s document.

Whether or not Radiant World will be repaid the money it says it’s owed is crucial to the next chapter in a story that has gripped the global commodities industry, after Bloomberg first reported in July on concerns that the company was using falsified documents to raise financing.

Radiant World, which has denied wrongdoing, was in court in Singapore on Wednesday for a hearing in a case brought by a unit of Mizuho Financial Group Inc. The Japanese bank is seeking to put court-appointed restructuring executives in charge of Radiant World’s operations. The court adjourned on Wednesday with a decision due on Thursday afternoon, according to people familiar with the matter, who asked not to be named because it isn’t public.

Radiant World’s founder Pinkesh Nahar has argued there’s no reason to appoint judicial managers because the company is solvent; Mizuho has accused Radiant World of fraud and said the move is necessary given “serious doubts and concerns regarding the probity of the board and leadership.”

Trade Debtors

The balance sheet showing the financial position of Radiant World Corporation Pte — the group’s main operating entity — is dated Sept. 8. It was filed as an attachment to an affidavit by Bhupeshkumar Gejvala, a Radiant World director, which was in turn filed as an attachment to an affidavit by Nahar in the Mizuho case.

It shows the vast majority of the assets of $1.072 billion are made up of trade receivables, with a list of trade debtors that contains more than 30 companies, including traders Vitol Group and Gunvor Group and brokers StoneX and Marex.

However, the top ten largest receivables account for 94% of the total. The largest of them is listed as Glencore International AG — a unit of Glencore Plc. It’s unclear that Radiant World will be able to secure payment of the $150.4 million it says it’s owed by Glencore, since the latter in August filed a notice setting off money it owes Radiant and related companies against money they owe it, according to a lawsuit from the Radiant group of companies. Glencore has dismissed the lawsuit as “meritless”; a spokesperson declined to comment on the figures in Radiant World’s balance sheet.

The fourth-largest debtor is listed as Vitol Asia Pte — a unit of Vitol — with a receivable of $100.7 million.

Vitol, however, suggested that the company did not believe it owed Radiant World anything. “Vitol ceased trading with Radiant World some months ago. All transactions have been settled,” a spokesperson for the company told Bloomberg News.

A spokesperson for Gunvor declined to comment. Spokespeople for StoneX and Marex didn’t immediately respond to requests for comment. The three companies are listed in the balance sheet as owing Radiant World amounts ranging from $1 million to $1.5 million.

Shared Space

The obscure, apparently UAE-based companies — Milla Sky Trading, Thinkertech General Trading, Fly Horse General Trading and Bigbubble General Trading — all rank in the top ten of Radiant World’s list.

Bloomberg attempted to contact each of the companies. Apart from Milla Sky Trading, none of them answered phone calls or emails seeking comment.

The business license for Fly Horse General Trading lists an address in the same shared office space in Ajman as Milla Sky Trading. When Bloomberg visited, however, there were no Fly Horse employees there, nor any indication that the space was used by Fly Horse.

Thinkertech’s business license expired last year. It lists a phone number that didn’t connect, and gives an address of a shared office space in Dubai. Front desk staff at the shared office space said they had not heard of a company called Thinkertech.

Bigbubble’s business license lists two partial addresses that only identified a neighborhood and the building owner. Bloomberg visited both neighborhoods but couldn’t find either office. One neighborhood was an industrial area which consisted of a large plot of sand across the street from Dubai’s fruit and vegetable wholesale market and warehouses. The other was a residential area comprised primarily of restaurants, juice bars and bakeries.

Bloomberg also sent questions to the email addresses in the screenshots provided by the Radiant World spokesperson, in which representatives from Fly Horse, Bigbubble and Milla Sky appeared to confirm their debts to Radiant World on Tuesday. All three were addresses hosted on 163.com, a free Chinese email service operated by NetEase.

A further receivable of $64.8 million is listed as being owed by Wuhan Iron & Steel Trading. Bloomberg was unable to identify a company by that name. Baowu Group, the parent of a similarly named Chinese steelmaker called Wuhan Iron & Steel, has not traded with Radiant World for iron ore and does not recognize any debt to it, according to people familiar with the matter, who asked not to be named as they weren’t authorized to speak publicly. Baowu handles almost all raw material procurement for Wuhan Iron & Steel, they added.

Radiant World’s spokesperson also sent a screenshot of an email from “financeops@wisco.cn.com” confirming the debt. That email address is mentioned on a corporate website that appears to have been created in August, according to a log of the site’s certificates. The “about” page still includes placeholder language: “This page is written as sample copy. Replace it with the company’s founding year, ownership structure and history once confirmed.”

When Bloomberg visited the Dubai address listed on the website on Wednesday, the reception desk staff said that there was no company by the name of Wuhan Iron & Steel Trading registered as having an office in the building.

A further $298 million of Radiant World’s receivables are listed as being owed by companies which are closely connected to Radiant World, according to previous Bloomberg reporting and people familiar with the matter, who asked not to be named as they weren’t authorized to speak publicly. They include Quanterra International, Sapphire Minmetals and Grand Promise Enterprise Ltd.

Spokespeople for Quanterra and Grand Promise didn’t respond to requests for comment. Rakesh Sethi, Sapphire’s chairman, declined to comment.

Photograph: Iron ore operations in Australia; photo credit: Brendon Thorne/Bloomberg

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