Noble shares fall as much as 9% after Muddy Waters says it has shorted the stock

SINGAPORE (Bloomberg) - Muddy Waters, the research firm founded by short seller Carson Block, published a report questioning Noble Group's cash flow and management, building on recent negative commentary against the commodity trading company.

The US company has taken a short position in Noble, Asia's largest commodity trader by revenue, Muddy Waters said on its website.

Noble Group spokesman Stephen Brown said the trading company does not comment on third-party reports.

Noble fell as much as 9.3 per cent today to 82.5 cents, the lowest since September 2013. The stock was down 5.5 per cent at 86 cents as at 1245pm.

Muddy Waters' report follows the critique of Noble's finances and accounting practices by an anonymous group that calls itself Iceberg Research.

Noble's stock had declined by 24 per cent at the close of trade yesterday, following the publication of the first of three Iceberg reports this year.

Noble, which is based in Hong Kong and trades in Singapore, disputed the Iceberg reports as inaccurate and began legal action in Hong Kong's High Court against a former employee it said is behind Iceberg's research.

Short selling is the sale of stock borrowed from shareholders. People who sell short hope to profit by repurchasing the securities later at a lower price and returning them to the holder.

Muddy Waters, which cites some of the issues raised by Iceberg, said the anonymous group had no involvement in its report and wasn't given advance knowledge of its publication.

Muddy Waters also said it was not involved in Iceberg's research on Noble.