Radiant World and affiliated iron ore trader Sapphire Minmetals have cut more jobs across Asia and Europe as mounting lawsuits, frozen assets and the loss of trading partners squeeze their operations.
Radiant World has lost nearly half its iron ore traders in China and Singapore, while staff have also departed its London and Geneva offices, Bloomberg reported on Tuesday, citing people familiar with the matter. Some employees were dismissed and others resigned. Sapphire Minmetals has also reduced staff in China and Singapore.
The retrenchment follows a $499 million worldwide freezing order imposed by a London court at the request of a fund managed by Jefferies Financial Group, which alleges Radiant World and Sapphire Minmetals falsified iron ore invoices as part of a fraudulent scheme.
Radiant World has previously denied wrongdoing and said it conducts its business according to the highest commercial and legal standards.
The dispute threatens what was once a sizeable commodity trading operation as lenders, counterparties and employees retreat. Major trading houses including Vitol Group, Cargill and Glencore (LON: GLEN) moved to cut ties with Radiant World after concerns emerged in July over allegedly falsified documents provided to lenders.
Legal squeeze
Radiant World also faces lawsuits in Singapore from trade-finance platform Incomlend and a unit of Japan’s Mizuho Financial Group. Incomlend is seeking more than $34 million over allegedly fraudulent Glencore contracts.
Authorities have also scrutinized the company. The US Department of Justice, US Commodity Futures Trading Commission and Singapore police are investigating Radiant World, while Singapore authorities have raided its headquarters.
Glencore, previously a major backer of the group, has taken a $480 million provision related to its exposure to Radiant World. Radiant World and Sapphire Minmetals have in turn claimed they suffered more than $2 billion in losses because of Glencore’s actions.
The latest staffing reductions are the second round since July, when lenders began withdrawing credit lines and major commodity traders distanced themselves from Radiant World.
Among the departures is Leon Jin, a veteran trader who headed Radiant World’s iron ore business in China. Jin left in late August after the company encountered difficulties carrying out daily operations, Bloomberg reported.
Base metals traders Francois-Henri Audibert and Kelvin Li are also said to be leaving. Radiant World still has staff in its metals unit, which operated largely independently from the troubled iron ore division.
Sapphire Minmetals has cut two operations employees, one in Shanghai and another in Singapore, while retaining a small group of traders in Beijing to manage its remaining iron ore business.
Radiant World and Sapphire Minmetals are legally separate but closely related, leaving both exposed to the freezing order as their trading operations contract.
