Noble could have been more transparent: CEO

Noble CEO Yusuf Alireza (above) said Noble could have exposed itself to non-listed competitors if it had shared too much detail on its business model, but that would be better than the damage it had suffered.
Noble CEO Yusuf Alireza (above) said Noble could have exposed itself to non-listed competitors if it had shared too much detail on its business model, but that would be better than the damage it had suffered.PHOTO: REUTERS

If it had shared its business model, it might have been able to fend off short-sellers, he says

If the Noble Group had been more transparent, it could have been better placed to fend off attacks by short-sellers in the Iceberg saga, said chief executive Yusuf Alireza yesterday.

Mr Alireza told a Singapore Institute of Directors conference that a more open policy may have meant important information could have been leaked to competitors, but the risk would have been worth it.

"In hindsight, I should have been more forceful with the board about supporting more transparency because I think if we had more transparency, we would be less exposed," he added.

As the only listed, investment-grade commodities trader, Noble could have exposed itself to non-listed competitors if it had shared too much detail on its accounts and business model, but that would be "the lesser of two evils" compared with the damage the company had suffered instead, Mr Alireza noted.

"The more a company can do around explaining its business model, the less exposed it will be. No question about that," he said.

WORST CAREER MOMENT

I'm not going to sugar-coat it. This is one of the worst things I've gone through in my career, if not the worst. People assume where there's smoke, there's fire. It can be quite draining to (have to) constantly defend yourself.

MR YUSUF ALIREZA, Noble Group CEO

The comments came as Mr Alireza reflected on the key lessons learnt in the eight months since Iceberg Research released a series of reports accusing Noble of accounting and governance issues.

Noble had issued statements refuting the reports, but it did not launch a major public engagement effort until August, when an investor day was organised to address concerns. By then, Noble's share price had fallen by around 60 per cent.

The firm also hired audit giant PwC to review its valuation contracts and models, an area that Iceberg had focused criticisms on. The review report, also out in August, said Noble did not breach any industry standards.

Iceberg has rubbished the report, insisting that Noble - similar to energy trader Enron before its collapse - has exploited accounting loopholes. This kind of "he says, she says" exercise has not been easy for him as Noble's chief, Mr Alireza said yesterday.

"I'm not going to sugar-coat it. This is one of the worst things I've gone through in my career, if not the worst. People assume where there's smoke, there's fire. It can be quite draining to (have to) constantly defend yourself.

"Up until (the investor day), every morning I would wake up and the first thing (I would do would be) to look at my BlackBerry to find out what (Iceberg) had done while I was sleeping. It was quite stressful.

"In the end, the only thing you can do - and I've run my whole career this way - is that you come in every day, and you do the best job you can for the company and the shareholders."

Mr Alireza suggested that regulators could do more in placing greater scrutiny on market manipulators. "Regulators have to find the right balance. Right now, the entire burden of proof is on companies. Being public comes with responsibility; that's fine, but there needs to be more balance."

Noble shares closed half a cent or 1.06 per cent up at 47.5 cents yesterday. It will likely announce its third-quarter results on Nov 6.

A version of this article appeared in the print edition of The Straits Times on October 15, 2015, with the headline 'Noble could have been more transparent: CEO'. Print Edition | Subscribe