How Glencore became entangled in $2bn battle with iron ore trader Radiant

{"text":[[{"start":11.84,"text":"In the summer of 2021, Radiant World had run into trouble."}],[{"start":15.629,"text":"Iron ore prices had shot up on booming demand from Chinese steelmakers, just as Radiant and its affiliates had placed a big bet they would fall. Within days they were facing down a $1.1bn loss payable to Glencore, its counterparty on the trade, according to a lawsuit filed in Singapore this week."}],[{"start":33.062,"text":"That could have marked the beginning of the end for the metals trader. Instead, Radiant grew at a rapid pace, tripling its revenues to almost $10bn by 2025, corporate filings show, as it shifted tens of millions of tonnes of iron ore to join the ranks of the world’s largest traders."}],[{"start":51.34,"text":"Radiant attributes much of its turnaround to a deal its founder Pinkesh Nahar had struck with senior Glencore executives."}],[{"start":57.585,"text":"The commodities giant would continue working with the iron ore trader, help it raise money and potentially buy a stake in the business that would help propel it to a $5bn valuation in five years, according to a $2bn legal claim filed by Radiant in Singapore against three Glencore entities. In return, Radiant and its affiliates would slowly pay down the $1.1bn."}],[{"start":79.742,"text":"That relationship has now broken down, with the companies embroiled in a fierce legal fight. Glencore has accused the trader of fraud, while Radiant in its lawsuit alleges the commodities group misrepresented the pair’s ties."}],[{"start":92.595,"text":"The repercussions have already been felt inside Glencore. Peter Hill, a senior executive, was stood down from his role pending the outcome of a review into the company’s dealings with Radiant, the FT reported on Thursday, citing a person familiar with the matter. This followed enquiries from the FT about Hill’s involvement with the iron ore trader."}],[{"start":112.36,"text":"The plan to work with Radiant had reached the highest ranks of Glencore, including chief executive Gary Nagle, according to messages used as evidence in a separate claim against Radiant initiated in Singapore by Mizuho, one of the dozens of lenders who did business with the iron ore trader."}],[{"start":127.6,"text":"“I spoke with Gary and board about our stuff last week for a bit, and they understand it’s not a smooth line . . . We all in it together,” Hill wrote to Nahar in a February 2025 WhatsApp message submitted as evidence. “Thank you, my friend . . . this will be an amazing achievement for all,” he added."}],[{"start":146.56,"text":"Just over a year later, when Radiant again ran into trouble as lenders and trading partners began raising questions over the authenticity of documents that underpinned its trades, Glencore’s years-long support buckled."}],[{"start":159.397,"text":"It has joined the chorus of banks and financial institutions that alleged Radiant had used false invoices to secure funding."}],[{"start":168.24,"text":"The episode marks the latest in a string of alleged frauds to hit the trade finance market, as Radiant’s lenders race to recover billions of dollars they lent against invoices, some of which they now suspect are fraudulent."}],[{"start":178.04,"text":"Glencore has found itself at the centre of the controversy amid an escalating war of words with Radiant and the bitter legal battle, just as it seeks to move on from a 2022 corruption scandal that saw it plead guilty to bribery and market manipulation charges and pay a $1.5bn fine."}],[{"start":null,"text":"

"}],[{"start":205.52,"text":"Radiant has alleged in the lawsuit that Glencore deliberately kept the “true nature” of their trading arrangements out of its audited records after independent monitors were installed to oversee its internal conduct as part of its settlement with the US Department of Justice following its guilty plea."}],[{"start":215.68,"text":"WhatsApp messages allegedly exchanged between Hill and Nahar appear to show that the Glencore executive set up a separate channel of communication with Radiant’s founder in 2024."}],[{"start":226.28,"text":"“The other phone is monitored,” Hill wrote on December 9, followed by “everything recorded,” according to evidence submitted by Radiant in the Mizuho claim. In another 2025 message, Hill reminds Nahar that “every email and exchange is tracked and visible to the US Department of Justice.”"}],[{"start":245.04,"text":"Glencore has rejected Radiant’s allegations and declined to comment on the alleged correspondence. It issued a public response this week accusing Radiant of falsified invoices and contracts as well as fabricating emails purportedly from Glencore employees."}],[{"start":261.12,"text":"“Essentially, they are suing us for telling the truth about their fraud. The fact is that their own conduct is the reason for their situation and why several of their finance providers are suing them,” Glencore said."}],[{"start":271.486,"text":"Radiant is aware of investigations involving the Singapore Police Force, the DOJ and the UK’s Financial Conduct Authority, Nahar disclosed in an affidavit filed in response to the Mizuho lawsuit."}],[{"start":283.999,"text":"The links between Radiant and Glencore began in the late 2000s, when Nahar was introduced to Kunal Ahuja, a Glencore manager in Delhi, at a coal conference in Bali, according to a person familiar with the matter and Nahar’s affidavit."}],[{"start":297.846,"text":"Radiant, then known as Royalline Resources, was a small iron ore trader that conducted business from India to China. In 2009, Nahar set up another company called Sapphire Minmetals, for which he hired businessman Rakesh Sethi to oversee its sales into China."}],[{"start":315.88,"text":"Radiant’s Singapore lawsuit states that Glencore and Radiant began physical trades of iron ore together around 2008. There is little information on how the relationship developed in the intervening decade but in 2017, Ahuja invited Sethi and Nahar to his home to discuss putting together derivatives trades with Sapphire and Radiant entities, Nahar said in his affidavit."}],[{"start":338.84,"text":"Nahar had by this point sold Sapphire to Sethi. Although the business was owned by the Indian businessman, the two kept “a close working relationship”, the affidavit adds."}],[{"start":null,"text":""}],[{"start":348.143,"text":"Over two days at Ahuja’s Delhi home, they hashed out how a derivatives trade with Glencore would work."}],[{"start":354.48,"text":"The companies would trade over-the-counter derivatives without cash-margin requirements that would ordinarily require Radiant and the affiliated companies to post collateral if the price of iron ore moved against it, according to the lawsuit and Nahar’s affidavit."}],[{"start":368.92,"text":"Glencore would act as the counterparty and losses would be rolled forward rather than closed out. The lack of collateral left Glencore exposed to losses if Radiant and the other traders were unable to repay."}],[{"start":379.205,"text":"There was one more constraint. Glencore’s exposure to a single entity was capped at approximately $500mn, so it wanted others to participate in the agreement, according to Nahar’s affidavit. Sethi and Nahar asked mutual friend Amogh Malavia, who ran another iron ore trader, to join."}],[{"start":397.443,"text":"The terms of the arrangement were governed by the informal discussions between executives, Radiant alleged in the lawsuit, despite a May 2017 agreement signed by Sapphire and Glencore which Nahar claims existed solely for the mining company’s “own internal credit and record-keeping purposes”."}],[{"start":415.354,"text":"That assertion was tested in July 2021 as the price of iron ore fluctuated wildly. Radiant and its affiliates had amassed large short positions on iron ore, meaning they stood to benefit if prices fell or lose money if they rose."}],[{"start":430.62,"text":"But iron ore prices hit record highs that summer as producers struggled to keep up with demand from China."}],[{"start":437.378,"text":"Beijing quickly intervened, ordering its steel mills to curb production, which reduced demand and halved the price of the steelmaking mineral within two months."}],[{"start":446.629,"text":"By that point, it was too late for Radiant. Glencore had already crystallised the loss and demanded repayment of $1.1bn, the lawsuit alleges."}],[{"start":458.11,"text":"At around the same time, Radiant secured new funding that would become key to its rapid expansion."}],[{"start":464.64,"text":"Point Bonita Capital, a trade finance fund backed by US investment bank Jefferies, started lending to the group in 2021 with an initial $35mn in financing."}],[{"start":473.625,"text":"Within four years, Point Bonita had become one of Radiant’s largest financial backers as its exposure to the company reached more than $600mn, according to people familiar with the matter. It had also started funding Sapphire, the entity overseen by Sethi."}],[{"start":null,"text":""}],[{"start":491.36,"text":"Point Bonita was financing Radiant and Sapphire by buying receivables and invoices that the two companies said were owed by Glencore. It ultimately purchased $2.54bn worth of invoices from Radiant and a further $1.3bn from Sapphire over five years, according to email correspondence submitted in the Mizuho claim."}],[{"start":510.717,"text":"On the surface, Nahar was running in the big leagues of iron ore trading, with a property and car collection to match, as his business generated billions in revenues. But behind the scenes, Hill kept up pressure on what appeared to be relatively small payments."}],[{"start":525.581,"text":"“Pls ensure you pay us $4-5m tmrw. I will meet with Gary and co tmrw to finalise warrants investment — this is huge for you and a massive achievement for me/us,” Hill wrote to Nahar in May 2025, according to the affidavit."}],[{"start":541.6,"text":"“We need to prove to audit that they have resumed and are continuing consistently in order to avoid a restatement and publication,” he added."}],[{"start":548.56,"text":"By November, Glencore had begun steps to buy warrants that would convert into equity and give it a stake in Radiant. Formal agreements were drawn up by Linklaters and signed in November and December last year, according to information submitted in the Mizuho lawsuit."}],[{"start":564.64,"text":"This came as Radiant faced a funding squeeze triggered by the unrelated collapse of US car-parts company First Brands Group, which exposed an elaborate web of invoice financing with lenders alleging that receivables had been fabricated or pledged to multiple lenders."}],[{"start":580.96,"text":"Point Bonita had $715mn of First Brands exposure and, under pressure from investors to return cash, had started restricting funding to other companies, including Radiant, according to people familiar with the matter."}],[{"start":594.524,"text":"The fund had $334.4mn in outstanding invoices tied to Glencore, $42.5mn of which were overdue as of February this year. Ross Berger, a Point Bonita managing director, chased down the payment, according to Nahar’s affidavit, but nothing arrived."}],[{"start":611.146,"text":"Nahar and Hill exchanged messages in March, as Radiant’s founder demanded that Glencore release about $190mn to Jefferies. “Peter wht [sic] sadistic pleasures u get doing ths [sic] to us?,” Nahar wrote to Hill on March 3, according to his affidavit."}],[{"start":626.16,"text":"The money never arrived. Glencore said in July that it had cut Radiant off after almost 20 years."}],[{"start":632.215,"text":"Documents disclosed by Radiant suggest Glencore’s exposure stands at $480mn while the Point Bonita fund has almost $500mn worth of exposure to Radiant and Sapphire, the FT reported this month."}],[{"start":646.44,"text":"Nahar has claimed Radiant remains solvent with more than $1bn of assets on its balance sheet, most of which are receivables."}],[{"start":653.399,"text":"Documents provided to the Jefferies-backed fund as part of a freezing order obtained in London’s High Court paint a bleaker picture — there is $10,000 of cash left. But Nahar may have something else up his sleeve."}],[{"start":666.72,"text":"When Hill previously messaged Nahar “give me money” in November 2024, he responded: “Crypto or diamonds?”"}],[{"start":678.08,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1789782124_2959.mp3"}