Glencore was Radiant World’s ‘senior partner,’ executive says

The comments are the latest headache for Glencore stemming from its dealings with Radiant World and related companies, on which it has taken a US$480 million provision – one of its largest trading losses in its history as a public company.

The relationship between Glencore Plc and the network of companies linked to Radiant World was one of “senior partner-junior partner,” a top executive at one of the firms alleged in an interview with Bloomberg.

Rakesh Sethi, who is chairman of Sapphire Minmetals Corporation, said that Glencore’s relationship with the group was driven by its desire to increase its iron ore trading volumes.

“So we were like a partner,” he said. Glencore wanted “more volume, more market control, more customer base”.

Sapphire was part of Radiant World until 2015, and Glencore has said it still sees the two companies as one combined group. The companies have both said they are legally separate.

The comments from Sethi are the latest headache for Glencore stemming from its dealings with Radiant World and related companies, on which it has taken a US$480 million provision – one of its largest trading losses in its history as a public company.

Bloomberg has reported on concerns that Radiant World provided lenders with falsified documents to raise financing. One lender has claimed in court filings that Radiant World sent it contracts with Glencore that the London-listed miner and commodities trader later said were not genuine.

Sethi’s comments about the closeness of the group’s relationship with Glencore echo those made by Radiant World itself. In a letter to Glencore last week, lawyers for Radiant World claimed that Glencore had approved its new hires, directed its payments, and advised on fundraising and the pricing of Radiant World’s physical trades.

“Glencore organised and structured the arrangements and at all material times acted as the senior partner in the relationship,” according to a copy of the letter seen by Bloomberg. The letter was first reported by the Financial Times.

A spokesperson for Glencore said: “These claims are meritless and Glencore will vigorously contest them,” repeating an earlier statement on the claims made by Radiant World. “Glencore has incurred losses and been exposed to risks by Radiant’s actions and will take appropriate action.”

A spokesperson for Radiant World did not immediately respond to a request for comment. Radiant World has previously denied wrongdoing and said it conducts its business to the highest commercial and legal standards.

Sethi said he had worked for Sapphire since the time when it was still part of Radiant World, which was until 2015. He said that the relationship with Glencore had begun in 2011 or 2012.