Mizuho alleges likely forged letter purportedly from Glencore — The Japan Times
Japanese bank Mizuho accused trader Radiant World in a Singapore lawsuit of suspected fraud involving receivables for iron ore deliveries. As The Japan Times reports, Glencore told the bank that, in its view, Radiant World fraudulently created correspondence intended to confirm the trader's intention to pay Mizuho nearly $100 million.
Correspondence review
According to case materials, less than two months earlier Mizuho had extended $95.5 million in loans to Radiant World. The financing was secured by invoices for five shipments of iron ore that the trader allegedly sold to Glencore International.
On August 5, Radiant World asked Glencore iron ore operations manager Mark Francis to confirm payment of the debt and copied a Mizuho banker into the correspondence. The following morning, the company forwarded the banker an attachment containing Francis's purported reply, which stated that Glencore would make the payment.
A Mizuho employee suspected forgery because he had asked to be copied into the correspondence between the two companies. After contacting Francis directly, he said that he had not received an email from Radiant World on August 5 and had not sent a reply. On August 11, Glencore told the bank that, according to its information, the five claimed transactions and invoices submitted by Radiant World did not exist.
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Positions of the parties and litigation
Radiant World founder Pinkesh Nahar rejected the allegations in written testimony reviewed by Bloomberg. According to him, the transactions were real, and Glencore had for many years acknowledged the relevant receivables, confirmed them to financiers, and paid them. Radiant World disagrees with Glencore's denial and intends to bring its own claims against the company.
Mizuho seeks to place Radiant World's key operating unit under judicial management. According to a table Nahar submitted in another proceeding, the company has about $870 million in outstanding liabilities to six creditors financing receivables. Mizuho's exposure is listed at $97.28 million.
Other creditors have also accused Radiant World in court proceedings of submitting falsified documents. At the same time, Radiant World and its affiliated Sapphire Minmetals filed a lawsuit in Singapore against Glencore for approximately $2 billion. Glencore called the lawsuit unfounded and said that Radiant World had misled it and several financial institutions.
