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

Stock MarketsNov 20, 2018 06:29AM ET
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© Reuters. FILE PHOTO: A Noble Group sign is pictured at a meet-the-investors event in Singapore

By Anshuman Daga and Aradhana Aravindan

SINGAPORE (Reuters) - Singapore authorities are investigating Noble Group Ltd (SI:NOBG) 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.

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 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.

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.

"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 in the statement.

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.

Noble did not provide a comment to a Reuters query about the Singapore authorities' statement.

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.

ACRA said it had informed NRI's board of directors of the suspected breaches of the Companies Act and that it must provide further information.

"This follows an extensive review of the financial statements of Noble Resources International (NRI) for the financial years ended 31 December 2012 to 31 December 2016," the statement said.

Last week, Noble reported halving its quarterly net loss from continuing operations to $43.3 million and said its soon-to-be-completed restructuring would enable it to reposition its business in Asia Pacific and the Middle East.

Tuesday's announcement comes just as Noble was looking to appoint a new chairman after current leader Paul Brough brought the company back from one of the biggest near-death corporate experiences in Asia.

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

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