Commodity-finance risks back in focus amid Radiant World scrutiny

The collapse of major commodity traders in 2020 led to significant improvements in Singapore’s trade-finance safeguards. However, technology can only address part of the risk.

“The invoice is just a piece of paper; the real question is what the transaction that generated the invoice is,” said Blackstone & Gold Managing Director Baldev Bhinder, emphasising that lenders should look beyond the authenticity of documents and consider whether there is a genuine underlying trade.

“As long as one trader or lender operates outside these systems, the risks will resurface,” Baldev noted, adding that while digital initiatives are a step in the right direction, no single platform or software can fully eliminate trade fraud given the international nature of trade.

“The most fundamental issue is one of human biasness when it comes to longstanding relationships and big-name corporations, rather than legal documentation,” Baldev cautioned, highlighting the importance of maintaining robust controls even where there are established relationships or well-known counterparties.

Ultimately, technology can strengthen trade-finance safeguards, but effective protection still requires independent verification, appropriate control over the underlying commodity and sound commercial judgement.

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Commodity-finance risks back in focus amid Radiant World scrutiny