Singapore regulators refuse to allow Noble to transfer listing

The authorities said they were investigating Noble Group two weeks ago, more than three years after allegations against it came to light.
The authorities said they were investigating Noble Group two weeks ago, more than three years after allegations against it came to light.PHOTO: REUTERS

They cite 'significant uncertainties' over New Noble's financial position

Noble Group, once Asia's top commodity trader, will not be allowed to transfer its listing status to New Noble on the Singapore Exchange as part of its proposed restructuring, with regulators citing potentially inflated assets.

There are "significant uncertainties" about New Noble's financial position, said the police, Monetary Authority of Singapore (MAS) and Singapore Exchange Regulation (SGX RegCo) in a joint statement yesterday.

They added that it would be "imprudent" to allow the re-listing.

"This follows a careful review of the findings to date from the ongoing investigations into (Noble Group) and Noble Resources International," the agencies said.

Noble had previously announced that its US$3.5 billion (S$4.8 billion) debt restructuring had received approval from courts in England and Bermuda. It also suspended its shares from trading.

Late last month, the company moved the deadline for its restructuring back by two weeks to address regulators' concerns.

The authorities said they were investigating Noble two weeks ago, more than three years after allegations against it came to light.

 
 

A report by Iceberg Research claimed that its long-term contracts were probably overvalued, triggering a US$10 billion collapse in the firm's shares. Its market valuation fell to just $107.5 million.

Yesterday's joint statement added that despite clean audit opinions by Noble's statutory auditors for financial years ended Dec 31, 2014, 2015 and 2016, the authorities had continued to gather and review information, including data on substantial write-downs announced late last year and early this year.

These provided the basis to start overt investigations into potential breaches of Singapore's laws.

During the investigation, Noble submitted a set of simulated financial statements to show how New Noble's financial statements would be affected after considering potential non-compliance with accounting standards that the Accounting and Corporate Regulatory Authority highlighted in a letter to Noble Resources International last month.

The simulated statements show the net asset value of New Noble as at Dec 31 last year could be adjusted downwards by about 40 per cent, said the statement.

This is in addition to write-downs of over US$2 billion already made by Noble in the 2017 financial year.

There could be further reductions in the value, it added.

The Commercial Affairs Department and MAS are looking into other relevant areas on the preparation and disclosure of Noble Group's financial statements, including valuation of commodity contracts, the statement said.

The findings led the MAS and SGX RegCo to conclude there were significant uncertainties about New Noble's financial position, adding that "it would be imprudent to allow the re-listing as investors will not be able to trade in New Noble's shares on an informed basis".

A version of this article appeared in the print edition of The Straits Times on December 07, 2018, with the headline 'Singapore regulators refuse to allow Noble to transfer listing'. Print Edition | Subscribe