SINGAPORE - Iceberg Research updated its blog on Tuesday (July 21) with fresh criticisms levelled at Noble Group, rekindling the war of words between the two.
In its latest update, Iceberg said that confidence in Noble is "clearly eroding", as reflected by S&P's decision in June to revise the commodity giant's rating outlook from stable to negative.
Noble is still keeping its investment grade rating, but that's an anomaly, Iceberg said, adding: "It is difficult to understand why a company who has recorded abysmal operating cash outflow, for example (S$1.15 billion) since 2012 when Yusuf Alireza was appointed (despite a combined net profit of S$940 million during the same period) is still investment grade."
"Noble has been unable to explain this divergence contradicting themselves every time. Credit agencies will inevitably be forced to address this anomaly. The revision of the outlook is only the first step, which puts Noble in a vulnerable position."
This latest blog entry came after Iceberg's last update on April 16, when it urged shareholders to challenge Noble's management on accounting and governance issues during the company's annual general meeting.
These alleged issues were first highlighted by Iceberg in February. Since then Noble has been under public scrutiny, and saw its share price plunge over 40 per cent.
Since June 12, Noble has announced nine rounds of share buybacks, spending around S$75 million on this exercise.
Noble Group boss Yusuf Alireza and company founder Richard Elman have fought back, launching a lawsuit against Mr Arnaud Vagner, the person allegedly behind Iceberg, and making additional financial reporting in its first-quarter results, but they have failed to fully silence the critics. Last month, former Morgan Stanley banker Michael Dee released an open letter that questioned the ethics and competence of Noble's management. He also called for Mr Elman to resign.
Noble has also vowed to improve its transparency, announcing this month that it has appointed PwC to conduct an assurance review on its accounting and governance. But this review will not solve any problem, Iceberg said on Tuesday.
"The most obvious issue is that Noble has not clearly defined the scope of the review. Noble has not published the letter listing PwC's assignments. We believe that PwC will merely work on the valuation framework rather than the valuation of the portfolio itself, counterparty by counterparty… Importantly, PwC will not answer the question that the market is asking."
"Noble's credibility will keep falling. Too many of their arguments do not make any sense or never answer the point… Although Yusuf Alireza has desperately tried to discredit us, the market lends more credibility to our research every day. Noble is unable to understand that every time this company defames, sues and threatens critics, or when a chairman disrespects his own shareholders during the AGM, this company loses the support of its investors," it added.
"This futile corporate bullying will not help them regain control of the situation. It will make things worse."