Mizuho Sues Radiant World in Singapore Court as Police Probe Widens

Singapore police raided iron ore trader Radiant World last week and questioned employees as part of a widening investigation into allegedly falsified documents the company provided to banks. On August 28, Mizuho Bank filed the first public legal action against Radiant World in Singapore’s Supreme Court, seeking an injunction. At least five banks have been told that invoices underpinning their exposure to the company are not genuine, according to Bloomberg reporting on August 27.

Police raid and document fraud allegations

The Singapore police confirmed on August 20 that it was investigating Radiant World after reports were lodged against the trader. Officers raided the company’s local office last week and questioned employees. The investigation centres on concerns that Radiant World provided invoices and other documents to its banks that were not valid. Several major commodity traders have cut ties with the company amid these concerns.

Mizuho’s court action and insolvency concerns

Mizuho Bank, a unit of Japanese lender Mizuho Financial Group, filed an injunction against Radiant World Corp in Singapore’s Supreme Court on August 28. The hearing was listed as an originating action and summons related to corporate insolvency. Mizuho is a creditor of Radiant World Corp, according to court filings. The bank declined to comment on what action it is seeking to block.

Scope of the investigation expands

The US Justice Department and Commodity Futures Trading Commission are also probing transactions involving Radiant World and its creditors, according to Bloomberg reporting. Bloomberg reported on August 27 that at least five banks had been told that some of the invoices underpinning their exposure to Radiant World are not genuine. Radiant World has not been accused of wrongdoing and investigations do not always lead to charges. The company has denied wrongdoing and said it conducts its business to the highest commercial and legal standards.

Company’s limited response

Radiant World declined to comment on the police raid and court action. The company told Bloomberg: “The company is engaging with the relevant authorities, and it would not be appropriate to comment further while those processes are ongoing.” It added that it would not litigate the company’s affairs through the media. A Singapore police spokesperson said investigations were ongoing and further details were not available.

Final Thoughts

Mizuho’s court filing marks the first public lender action against Radiant World as authorities in Singapore, the US, and beyond investigate alleged document fraud. The case highlights growing credit risk in commodity trading and the need for tighter verification of financing documents.

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