Jefferies-linked fund secures $499 million freeze against iron ore trader

A trade finance fund operated by a unit of US bank Jefferies has obtained a court order freezing assets of up to $499 million belonging to iron ore trader Radiant World, its founder, and a former affiliate.

The order, issued by a London court, names Radiant World, founder Pinkesh Nahar, and Sapphire Minmetals — an entity previously part of the trader — according to a person familiar with the matter. The figure is significantly higher than earlier estimates of Jefferies' exposure to the company.

Previously, Jefferies had disclosed trade-finance-related exposure of roughly $300 million to Radiant World through its Point Bonita fund. That fund drew attention last year after the bank revealed hundreds of millions of dollars in exposure to bankrupt auto-parts maker First Brands Group.

The LAM Trade Finance Group II fund, run by a Jefferies unit in which the bank holds a minority stake, sought the freezing order amid growing scrutiny of Radiant World. Concerns have emerged that invoices the trader provided to its banks may not have been valid.

Radiant World has strongly denied the allegations. The controversy has prompted some counterparties and lenders to pause or restrict their business dealings with the company.

Jefferies and Radiant World did not respond to requests for comment, though Jefferies declined to comment to the Financial Times, which first reported the size of the exposure.