Glencore is facing a potential $1.4bn lawsuit from embattled commodity trader Radiant, according to the Financial Times. The mining and trading giant has already set aside $480m to cover its entire exposure to Radiant, as reported by The Business Times.
The dispute centres on unpaid metals transactions between the two companies. Radiant, which has been struggling financially, is now threatening legal action against Glencore to recover funds it claims are owed. The Financial Times reports that the lawsuit threat adds another layer of pressure to Radiant, which is already dealing with multiple legal challenges.
Radiant’s troubles have been mounting. Bloomberg has detailed how the company’s founder, sometimes referred to as the “Prince,” allegedly used fake invoices to secure bank financing. In Singapore, Radiant and its founder have already been sued for $34m, according to Yahoo Finance Singapore. The Straits Times has also published explainers on who Radiant is and why it has become a focus of attention in the commodities world.
For Glencore, the $480m provision suggests the company expects to absorb significant losses from its dealings with Radiant. The provision covers the full extent of Glencore’s financial exposure to the trader, according to sources cited by The Business Times.
The legal threat from Radiant is the latest twist in a saga that has drawn in banks, traders, and now one of the world’s largest commodity houses. The case highlights the risks inherent in physical commodities trading, where credit and trust are essential.
What to watch next is whether Radiant follows through on its lawsuit threat and how Glencore responds in court, as well as any further revelations about Radiant’s business practices.
