Noble Group rejects report questioning its accounting as shares fall

SINGAPORE - Mainboard-listed Noble Group has rejected claims by Iceberg Research made in a report questioning the company's accounting practices that sent its shares tumbling on Monday.

"The company completely rejects the allegations," Noble said in a statement to the Singapore Exchange on Monday afternoon, after SGX queried the unusual movements in its share price. "All material information to which Iceberg Research refers is in the public domain. There has been no material adverse change since the company last reported."

Noble, which manages industrial and energy product supply chains, said it "reserves its rights against Iceberg Research".

It added the company will announce its 2014 results on February 26.

Noble shares were down 7.9 per cent to $1.11 as at 1:15 p.m., heading for its biggest decline since November 2011. About 45.7 million shares changed hands, 208 per cent higher than the three-month daily average, Bloomberg reported.

Iceberg in a 17-page report dated Feb 15 on Noble claimed that the group exploits the accounting treatment of its associates to avoid large impairments and fabricate profit.

"We estimate Noble's equity is less than $360 million - from a reported $5.6 billion - after the various impairments we list (in Iceberg's report). On a price-to-book basis, the value of Noble's shares is conservatively valued at a mere ten Singapore cents, a 92 per cent fall from the current share price," Iceberg said.

Iceberg's website contains no analyst names, phone numbers or links to research notes, apart from the report on Noble.

Commenting on Noble's fall earlier today, CMC Markets analyst Nicholas Teo said that the situation resembles what hit Singapore-listed Olam when Muddy Waters launched a short-selling attack on the agricultural commodity firm in November 2012.

In its report then, Muddy Waters similarly claimed that Olam had an overly high leverage and was using accounting loopholes to beef up earnings.

Olam's shares fell 21 per cent over a four-week period following the report. Its share price has since recovered, helped by a cash offer by Temasek Holdings in March 2014.