SINGAPORE (Reuters): A Singapore High Court judge said interim judicial managers were needed at Radiant World to investigate suspected fraud at the iron ore trader, according to a copy of a document seen by Reuters.
The judge on Thursday ordered the appointment of KPMG as interim managers.
Judge Kristy Tan wrote there was enough initial evidence that Radiant World "is or is likely to become unable to pay its debts," to support the appointment, according to the document dated Thursday in a case brought by Radiant World creditor Mizuho Bank.
Radiant World has faced mounting challenges since banks and counterparties began distancing themselves because of concerns that invoices provided to its banks may not have been valid. It has denied the allegations.
Radiant World, its spokesperson, and founder Pinkesh Nahar did not immediately respond to requests for comment on Friday.
RADIANT WORLD HAS SAID INTERIM MANAGERS ARE NOT NEEDED
It has said previously there is no need to appoint interim judicial managers because it is not insolvent and that doing so would not be in the best interest of its creditors.
Court-appointed managers typically take over management of companies while the court decides whether to appoint a full judicial manager.
"There is an urgent need for interim judicial managers to investigate the company's affairs in the light of the prima facie pattern of fraudulent conduct on the part of the company's management that has been seen," the judge wrote.
"The interim judicial managers will be placed to ascertain how endemic any fraud is," she wrote.
The judge also said interim managers were needed to restore "some degree of external confidence" in Radiant World after financiers and trading counterparties froze accounts, issued demands and withdrew from commercial relationships.
Mizuho in June provided some $100 million in credit to Radiant World that was secured by invoices that a counterparty to the iron ore trader later said were invalid, Reuters reported earlier this month, citing documents and a source with direct knowledge of the matter.
The bank filed a case against Radiant World in Singapore's Supreme Court in August.
The order from the High Court judge, part of the Supreme Court, is based on a preliminary assessment and is not the final finding.
(Reporting by Solomon Cefai; Editing by Tony Munroe and Barbara Lewis) -- Reuters
