Singapore authorities block Noble Group's plans to transfer listing to New Noble on restructuring

Stanislaus Jude Chan

SINGAPORE (Dec 6): The Monetary Authority of Singapore (MAS) and Singapore Exchange Regulation (SGX RegCo) have decided not to allow Noble Group to transfer its listing status to New Noble as part of group’s proposed restructuring.

The authorities say this follows a careful review of the findings to-date from the ongoing investigations into Noble and its wholly-owned subsidiary, Noble Resources International (NRI).

“MAS and SGX RegCo have concluded that there are significant uncertainties about the financial position of New Noble. 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. MAS and SGX RegCo will therefore not allow the re-listing of New Noble to proceed,” the Singapore Police Force (SPF), MAS and SGX RegCo say in a joint statement on Thursday.

On Nov 15, Noble had said that its controversial restructuring plan – which would have seen its investors’ shareholding significantly diluted and its creditors owning most of the company – had been sanctioned by the relevant courts and would proceed.

See: Noble gets go-ahead for controversial restructuring plan, pays funds into court in ongoing legal suit

But less than a week later on Nov 20, MAS, the Commercial Affairs Department (CAD) of the SPF, and the Accounting and Corporate Regulatory Authority (ACRA) announced they are launching an investigation into beleaguered commodities trader.

According to a joint statement by the authorities, Noble was suspected of making “false and misleading statements” as well as breaches of disclosure requirements under the Securities and Futures Act (Cap. 289).

See: Noble comes under investigation for potential accounting & regulatory breaches

Following the commencement of the investigations, Noble submitted to SGX RegCo a set of simulated financial statements to illustrate the effect on New Noble’s financial statements, after considering the potential non-compliance with accounting standards highlighted by ACRA in its letter to Noble dated Nov 20, 2018.

The authorities say the simulated financial statements show that the net asset value (NAV) of New Noble as at Dec 31, 2017, could be adjusted downwards by about 40%, and that the NAV as at Mar 31, 2018 could be adjusted downwards by about 45%. These adjustments would be in addition to the write-downs of more than US$2 billion ($2.7 billion) already made by Noble in FY2017.

Arising from investigations by CAD and MAS, the authorities point out that there could be even further reductions in New Noble’s NAV that extend beyond the potential non-compliances with accounting standards highlighted by ACRA.

“CAD and MAS are looking into other relevant areas in connection with the preparation and disclosure of [Noble Group’s] financial statements, including valuation of commodity contracts and other related assets,” the authorities say. “The findings arising from these investigations could potentially lead to a further erosion of New Noble’s NAV.”

In the joint statement on Thursday, the authorities add that they have been carefully reviewing, since 2015, the allegations raised by various parties against Noble Group and following up on information and leads provided.

Shares in Noble last closed at 8.1 cents on Nov 16, and remain suspended.