Radiant World and Sapphire Minmetals, two iron ore traders under pressure amid allegations of fraud, have made further reductions in staffing across their offices in Asia and Europe, according to people familiar with the matter.
Radiant World has lost almost half its China and Singapore iron ore traders, with further departures from its London and Geneva offices, the people said, asking not to be identified as the matter was not public.
There have also been cuts to Sapphire Minmetals’ operations in China and Singapore, they said.
Some of the staff have been let go while others have resigned, they added.
Rakesh Sethi, Sapphire’s chairman, told Bloomberg that he was putting new trading business on hold while he addressed the company’s legal disputes.
“I don’t intend to do further business until I sort out these things,” he said.
Radiant World and Sapphire Minmetals are legally separate but closely related. They are both subject to a US$499 million (S$635 million) worldwide freezing order imposed by a London court at the behest of a fund managed by Jefferies Financial Group, which alleged that they had falsified iron ore invoices as part of a “fraudulent scheme” against it.
Radiant World is also being sued in Singapore by creditors Incomlend and a unit of Japanese lender Mizuho Financial Group.
Radiant World and Sapphire Minmetals, meanwhile, have collectively claimed that they have incurred losses of more than US$2 billion due to the actions of Glencore, previously a major backer of the group.
Bloomberg reported in July that top commodity traders including Glencore had moved to cut ties with Radiant World amid concerns it had provided falsified documents to lenders.
A spokesperson for Radiant World did not respond to a request for comment. The company has previously denied wrongdoing and said it conducts its business to the highest commercial and legal standards.
The job cuts are the second round of reductions since July. Radiant World now has half the number of iron ore traders it did in China before August, and has also more than halved its number of iron ore operations staff in the country, the people said.
The departures follow the exit of Leon Jin, a veteran trader who headed Radiant World’s iron ore business in China and left the company earlier in September after difficulties carrying out daily operations.
At the same time, base metals traders Francois-Henri Audibert and Kelvin Li are also leaving the company, separate people familiar with the matter said.
Still, a number of staff remain at Radiant World’s metals unit, which operated largely independently from its iron ore division.
Traders in London and Geneva have largely closed out their positions and ceased trading, some of the people said.
Meanwhile, Sapphire Minmetals has cut two operations employees – one in Shanghai and another in Singapore – and is retaining a small number of traders in Beijing to handle its remaining iron ore business, the people said.
Sethi told Bloomberg that some Chinese iron ore buyers had tried to take advantage of the company’s situation by offering to buy from it at prices far below the market, and that in such circumstances, it did not make sense to continue trading actively.
“Some people are leaving, but some new people are under interview, and some new people will be joining soon,” Sethi added by e-mail. BLOOMBERG
