(Sept 8): A fund managed by Jefferies Financial Group Inc has accused Radiant World of falsifying iron ore invoices as part of a “fraudulent scheme” against it in a US$500 million (RM2 billion) London court claim.

The lawsuit was filed in late August and led a judge to impose a worldwide freezing order against Radiant World and its founder, as Bloomberg previously reported. However, the details of the claim have not previously been made public, and the case represents one of the first public accusations of fraud against Radiant World from one of its major lenders.

In a summary of its claim filed at the High Court and made public on Tuesday, LAM Trade Finance Group II LLC accused the defendants in the case of perpetrating a “fraudulent scheme” that induced the fund to pay “large sums” to both Radiant World Corporation Pte, the company’s main operating unit, and Sapphire Minmetals Corporation Ltd, a closely related but legally separate company.

“This included falsification of invoices, notices of assignment, contracts, and email correspondence,” the fund, which is run by Point Bonita, part of the US firm’s asset management division, said in the claim form. “The claimant’s investigations revealed that the fraud had been concealed from it for some time.”

The defendants are Radiant World’s main Singapore operating company, its Hong Kong holding company, its founder and majority shareholder Pinkesh Nahar, Sapphire Minmetals and its majority owner Rakesh Sethi.

Spokespeople for Jefferies and Radiant World did not immediately respond to emails seeking comment. Sethi, Sapphire’s chairman and majority owner, had no immediate comment when reached by phone on Tuesday.

Bloomberg reported in July that several top commodity traders had stopped doing business with Radiant World amid concerns it had provided falsified documents to banks to raise financing. Radiant World denied wrongdoing and said it conducts its business to the highest commercial and legal standards.

The Jefferies claim is for more than US$500 million, according to its legal filing, without clarifying how this was calculated. Bloomberg previously reported that the fund’s exposure to Radiant World was less than US$300 million and its exposure to Sapphire Minmetals was much smaller than that.

The Jefferies fund is also seeking a freezing injunction against Radiant World, Sapphire Minmetals and their majority owners in Singapore, with a hearing due to be heard on Wednesday.

Uploaded by Magessan Varatharaja