SINGAPORE - Embattled commodities trader Noble Group may seek court-appointed administration in Britain after Singapore authorities blocked its relisting plans, and is disputing regulators' allegations of improper accounting, the board said early on Friday (Dec 7).
This was despite Singapore regulators' announcement just the evening before that Noble will not be allowed to continue with its relisting as "New Noble".
The board, which still intends to complete the restructuring of the struggling Noble, said that it is weighing alternative processes that do not involve a transfer of the listing status.
"In doing so, the board, in discharging its fiduciary duties, may implement the restructuring through a court-appointed officer," the directors added.
This option, floated in Noble's restructuring circular, involves filing for administration in Britain. Creditors would then take control of the company, with shareholders and perpetual bond holders likely to be wiped out, previous reports have noted.
The Monetary Authority of Singapore (MAS) and Singapore Exchange Regulation barred the relisting of New Noble just two weeks after the Singapore police, the MAS and the Accounting and Corporate Regulatory Authority (Acra) jointly announced on Nov 20 that they were looking into suspected offences by Noble and a key subsidiary, Noble Resources International.
The investigation involves suspected false and misleading statements and breaches of disclosure requirements, as well as potential non-compliance with accounting standards.
Noble, which has had trading in its shares suspended, had initially gunned for a relisting on Nov 27.
But, after the news of the joint probe broke, the deadline was pushed back to no later than next Tuesday (Dec 11), in an extension of the long-stop date for legal agreements related to the restructuring.
The board said that it "regrets that after almost 19 months of engagement with its stakeholders, including shareholders, creditors and regulators", it was told that the transfer of its listing status would not be allowed, and called the move "a very disappointing development in this protracted process".
Noble Resources International will also submit a comprehensive response to the assessments and queries raised in a letter to the company from Acra, said the board.
The group's latest statement defended some of its accounting practices that had been flagged by Acra, such as its treatment of variable marketing contracts, its recognition of gains and losses, its treatment of overhead costs and its classification of current and non-current assets.
Noble also said that simulated financial statements cited by the authorities' most recent joint statement were submitted on a confidential basis, do not represent the views of the company and were intended only to illustrate the effects of applying Acra's accounting positions.
The authorities had noted that the net asset value of New Noble could have fallen by 40 per cent as at Dec 31, 2017, and by 45 per cent as at March 31, 2018, with those positions.
But Noble rejoined on Friday that the simulated financial statements also showed that applying the Acra accounting positions would have cut New Noble's pro forma net loss by 45 per cent as at Dec 31, 2017, and by 99 per cent as at March 31, 2018.
The board stressed that "it is premature to conclude that any charges will be issued by the investigating regulators arising from the investigations", adding that it understands the investigation to be related to "technical accounting-related issues" raised by Acra.
Noble slid downhill from 2015, when an anonymous outfit called Iceberg Research - later revealed to be former employee Arnaud Vagner, who had been a senior credit analyst at Noble in Hong Kong - attacked the trader's contract valuations and other accounting practices.
The group has since seen massive write-downs and defaulted on its bonds, with its market value shaved to one-tenth of what it was at its peak.