COMPANIES

Noble sues ex-customer over winding-up action

Chinese firm seeking payment from Noble Resources of alleged debt

MAINBOARD-LISTED Noble Group, the commodity giant battling accounting critics, sued a former Chinese iron ore customer of 10 years to stop any attempts to shut a Singapore unit over an alleged debt of US$102,718 (S$136,800).

Noble Resources International has been granted an interim injunction by the Singapore High Court blocking Rizhao Zhongrui Native Produce from winding-up proceedings, and is pursuing separate claims against the firm, Noble said. A closed hearing is scheduled for next Thursday.

The Chinese firm should not be allowed to harass and "assert undue commercial pressure" with the threat of action, Noble Resources' global head of iron ore and special ores Timothy Gazzard said in court papers.

Zhongrui said it suffered loss and reputational damage over poor-quality iron ore that it bought, and added that Noble was aggressive and unreasonable.

  • Mongolian firm sold for $87m

  • COMMODITY trader Noble Group said yesterday that it has sold its 100 per cent stake in a Mongolian company for US$65 million (S$87 million) in cash.

    The company, Enkhtunkh Orchlon (EO), owns 50,022ha of land in Mongolia's South Gobi basin.

    Noble said it has previously conducted exploration activities overseen by an independent international geological consulting group on the land.

    The exploration included mapping, ground magnetic and geophysical surveys, and drilling 200 test holes, "which confirmed coking and thermal coal" on the land.

    It said the exploration had previously confirmed the development prospects of the plot as a "contiguous extension" of land owned by Australia-based Guildford Coal on which commercial production work is being carried out.

    Noble said the book value and net tangible asset value of the shares of EO at the date of disposal were US$57.8 million and US$57.5 million respectively.

Noble Resources' "reputation and credibility would be in serious danger of being irreparably damaged" if Zhongrui is not restrained from trying to wind it up, Mr Gazzard said in the court papers. Zhongrui's attempts may also trigger default provisions in banking and credit facilities, affect contracts with suppliers and customers and reflect negatively on parent Noble, he said.

The court case comes as Noble fights on a wider front against criticisms of its accounting practices. In Hong Kong, the trader is suing a former employee, who it claims is behind the anonymous group Iceberg Research, for allegedly spreading false information about the company.

This week, a former Temasek Holdings executive, Mr Michael Dee, joined the attacks on Noble, calling on its founder and chairman Richard Elman to resign.

Disputes between decade-long partners Noble and Zhongrui began last year, according to court papers.

After a few rounds of e-mail exchanges between lawyers from both companies, the Rizhao, Shandong-based company in April issued a statutory demand for the payment that resulted in Noble's lawsuit. A creditor can seek to liquidate a company if payment is not made within three weeks after the demand.

"The statutory demand was plainly an abuse of process," Noble said in its e-mail response. Noble is financially strong and there is no suggestion that Noble Resources is insolvent, the com-modity trader's lawyers wrote to Zhongrui on April 15, telling the company to withdraw its statutory demand or face legal action. The unit had a 76 per cent jump in net income to US$176 million in 2013 on sales of US$17.2 billion.

Zhongrui will not "lose any sleep" and will resist Noble Resources' claims, the firm's lawyers said in court papers.

Noble shares rose 2.2 per cent to 69.5 cents yesterday. The stock has tumbled about 42 per cent since Iceberg Research sparked debate about Noble's accounting practices with a series of critical reports from February.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on June 20, 2015, with the headline 'Noble sues ex-customer over winding-up action'. Print Edition | Subscribe