November 20, 2018 / 7:56 AM / 23 days ago

Noble Group hit by regulatory probe, days before closing $3.5 billion restructuring deal

SINGAPORE (Reuters) - Singapore authorities are investigating Noble Group Ltd for suspected false and misleading statements, just days before the Singapore-listed company was to complete its $3.5 billion debt restructuring deal to prevent its collapse.

A Noble Group sign is pictured at a meet-the-investors event in Singapore August 17, 2015. REUTERS/Edgar Su/Files

Noble, once Asia’s top commodity trader, has seen its market value all but wiped out from $6 billion in February 2015 after its accounting was questioned by Iceberg Research. To rescue itself, Noble has shrunk its business by selling billions of dollars of assets, taking hefty writedowns and cutting hundreds of jobs, while defending its accounting.

The company, whose shares were suspended from trading from Monday due to the restructuring, is seeking to transform into an Asia-focused coal-trading business and list the overhauled business.

In a statement on Wednesday, Noble said its proposed restructuring was in the best interests of all stakeholders, including creditors and shareholders.

The company said it will “continue to work towards implementing its proposed restructuring within the previously disclosed timelines.”

In a statement on Tuesday, the Commercial Affairs Department (CAD) of the Singapore Police, the Monetary Authority of Singapore (MAS), the city-state’s central bank, and the Accounting and Corporate Regulatory Authority (ACRA) said they were jointly investigating Noble for suspected violations of securities and company laws.

Noble said the company had received a letter from the Singapore authorities requiring it to provide access to documents relating to the accounting treatment, consolidation and reporting of certain contracts of the company and its subsidiaries for the last few years.

Noble said it intends to co-operate fully with the authorities in their investigation.

In addition to the suspected false statements, the probe also covers potential non-compliance with accounting standards by Noble Resources International Pte Ltd (NRI), a fully-owned Singapore-based subsidiary of Noble, the authorities said in Tuesday’s announcement.

“CAD and MAS have directed Noble Group Ltd and NRI to produce documents relating to the preparation of Noble Group’s financial statements,” the authorities said.

They said this follows a thorough review of other relevant information, including information referred to authorities by the Singapore Exchange’s regulatory arm and other third parties.

The Singapore Exchange’s regulatory unit said it will review if the investigations will impact the financial statements already disclosed by Noble Group related to its restructuring, it said a separate statement.

“Trading can only start after restructuring has been completed and this is in turn dependent on our review,” it said.

However, Mak Yuen Teen, an associate professor of accounting at the National University of Singapore, said he did not expect the investigation by authorities to impact the restructuring.

“There’s going to be a new entity with a largely new board, and the investigations will be focusing on the previous board and management,” Mak said.

The CAD, the MAS and ACRA also said they were looking into breaches of disclosure requirements by Noble.

Last week, Noble reported halving its quarterly net loss from continuing operations to $43.3 million.

Reporting by Anshuman Daga and Aradhana Aravindan; Editing by Christian Schmollinger and Richard Pullin

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