Iceberg Research continued its attack on Noble Group over its allegedly fraudulent accounting and impairment-riddled financials with its third report released on Saturday evening.
This latest report alleged that its debts have been understated, for example it excludes a corporate guarantee which Iceberg says should be included as part of debt. Gross debt is 41 per cent higher than reported while net debt is 64 per cent higher. After adjustments, Iceberg claims that the Noble shares are only worth $0.1 apiece.
The report says that Noble says that its US$2.2 billion worth of inventory can be used to repay creditors but Iceberg says that there are US$8.1 billion of creditors with claims on this same inventory.
It said that if the accounts reflect these adjustments, major financial covenants will be breached. This usually means that banks can ask Noble to repay its debts immediately.
Iceberg also questioned the independence of the board, saying that its independent directors have been on the board for an average of 10 years while two of its directors have been on the board for 19 years.
A Noble company spokesman said: "We are aware of the third report and are studying it".
This was the third full report released by Iceberg Research, which has likened Noble to Enron - the United States energy giant that went bankrupt amid scandals of accounting fraud.
The first report came out on Feb 15, in which Iceberg claimed that Noble used accounting loopholes to hide impairments and fabricate profit. The second report, out on February 25, added that Noble exaggerated its asset fair value by at least US$3.8 billion to hide losses and cash flow problems.
The second report came on the same day when Noble announced a US$200 million impairment and the group's first quarterly loss in three years.
Despite the disappointing results, chief executive Yusuf Alireza rejected Iceberg's claims, adding that a disgruntled former employee is behind the little known blog.
As the war of words raged, investor confidence was shaken. Shares had dropped by as much as 30 per cent since the first report came out, hitting a 52-week low of 85 cents on Thursday.
But some colour returned to the counter Friday, after the move by two institutional investors - Eastspring Investments and Invesco - to raise their stake in Noble to over 5 per cent this week.
Investors read that as a vote of confidence and Noble went up 2.5 cents or 2.94 per cent on Friday to 87.5 cents.