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Bring in new management to regain credibility, Iceberg tells Noble Group
THE only way that Noble Group can regain credibility is to bring external executives into its management, said Iceberg Research on Thursday in its fourth report, released just hours before the commodity trading group publishes its full-year results.
Iceberg said that Noble has used many public relations strategies to deal with criticism over its accounting practices in the past 12 months.
"What has always remained constant is that they have not offered their stakeholders access to meaningful financial information; in particular the commodity contracts fair values," Iceberg wrote. "This has always been the priority. Everything else was a distraction."
With its management refusing to disclose such information thus far, Iceberg said: "The only chance for this company to regain credibility is to bring external executives on board. Only executives who have never been involved in this fiasco will have the courage to tell the truth. They will review the balance sheet, recognise unavoidable impairments, start frank discussions with the banks, and they will try to right the ship before it sinks."
Noble Group had on Tuesday said that lower coal price assumptions will lead to US$1.2 billion worth of impairments that will drag the firm into the red for the fourth quarter and the 2015 financial year. These are on top of the US$546 million already announced last year after Noble's sale of its remaining 49 per cent stake in joint venture Noble Agri.
Iceberg, the anonymous group that raised questions over Noble's accounting practices a year ago, said the number is still "far below" what it believes Noble should take. "Positive fair values were as high as US$7.5 billion at the end of Q3," it said.