Until its near-collapse last year, Singapore-listed Noble Group was one of Asia's top commodity traders and had been given a clean bill of health by its auditors.
Yesterday, its sudden reversal of fortunes was cited in Parliament by Education Minister Ong Ye Kung, a board member of the Monetary Authority of Singapore (MAS), when he explained why the authorities cannot prevent companies from suddenly going under despite regulations.
Mr Ong said that the regulator, Singapore Exchange Regulation (SGX RegCo), essentially ensures transparency and accuracy of companies' financial reports and will investigate when there is evidence of lapses.
Noble is being investigated for suspected false and misleading statements and breaches of disclosure requirements.
The regulator, however, is not able to prevent business failure, he added, speaking on behalf of Deputy Prime Minister Tharman Shanmugaratnam, who is the minister in charge of the MAS.
"Our regulatory regime does not, and cannot, dictate how listed companies make their commercial decisions or seek to prevent business failures," said Mr Ong.
"What regulation can do is to promote transparency and good disclosure practices so that investors are able to make informed decisions," he said in his reply to Non-Constituency MP Leon Perera who had asked about the measures that are in place to reduce the risk of SGX-listed companies experiencing sudden financial declines.
Mr Ong also said the Noble case was "peculiar" as reputable auditors gave the company a clean bill of health. But once there was enough evidence of lapses, the authorities launched an overt investigation, he added.
Elaborating on SGX's rules, he said listed companies are required to provide timely and accurate disclosure of all material information concerning their business, financial condition and prospects. This includes reporting financial results either quarterly or half-yearly, depending on their market capitalisation.
"Further, if the board sees clear evidence of significant improvement or deterioration in the company's near-term financial performance, it is obliged to make an immediate announcement," he added.
If companies do not provide clear or adequate disclosures, SGX RegCo can engage the listed company directly or make a public query. In the financial year ending in June 2018, SGX RegCo issued more than 400 public queries.
For serious disclosure lapses, it will investigate and take enforcement action.
The regulator also has a Fast Track programme in which companies with a good history of compliance and corporate governance can get their company submissions processed more quickly. Those with poor compliance records are subject to increased scrutiny.
Said Mr Ong: "In general, regulators take investigations seriously, seek expert advice, and if there are wrongdoers, they will face the full force of the law."