A fund managed by Jefferies Financial Group (NYSE:JEF) alleges that iron ore traders Radiant World and Sapphire Minmetals falsified documents underpinning financing transactions worth almost US$900 million ($1.29 billion).
The allegations appear in an affidavit filed in September and made public last week, according to a Bloomberg report.
Both trading companies have repeatedly denied wrongdoing.
Christopher Bushell, a lawyer representing Point Bonita Capital’s LAM Trade Finance Group II fund, alleges the companies “fabricated and falsified” documents “on an industrial scale”.
He says the fund received evidence of falsified documents covering at least 50 receivables — payments purportedly owed by customers.
The nearly US$900 million figure represents the transactions’ face value. Separately, Bushell says the fund is owed more than US$610 million under financing arrangements with the traders.
A London court has granted a US$499 million freezing order against assets belonging to the companies and their majority owners, Pinkesh Nahar and Rakesh Sethi.
Bloomberg reports that the defendants had yet to file their defence. The allegations remain contested.
Separately, a US judge on 6 October authorised Mariner Atlantic Multi-Strategy to seek payment records from the Federal Reserve Bank of New York and the Clearing House Interbank Payments System.
Reuters reports that the request relates to a Swiss criminal complaint alleging fraud and money laundering. Mariner says it has been unable to recover US$48.6 million lent to Radiant World, which denies wrongdoing.
Radiant World is a Singapore-based commodities trader whose business includes iron ore, aluminium, and copper.
Write to France Pinzon at Mining.com.au
Main image: Radiant World
