ICEBERG Research, whose report on commodity trading firm Noble Group is now under investigation by the Monetary Authority of Singapore (MAS), took to the development coolly, even while Noble welcomed the review.
"It is perfectly normal that the regulators review our report," it said in an e-mailed response to BT's queries. "As many people have remarked, we use public financial information, which should simplify the review process."
Noble welcomed the news that MAS has started a review of the research report by Iceberg.
The firm will fully cooperate with, and fully support, the investigation, it said.
On Wednesday, MAS said that it was "reviewing the statements in the Iceberg research report".
"All market participants are subject to market conduct provisions in Part XII of the Securities and Futures Act (SFA)," a spokesman said via e-mail, referring to regulations that cover the manipulation of the securities market and making false or misleading statements.
"MAS will take appropriate action if there are breaches of the SFA."
Shares for Noble rose 1.9 per cent, or two cents, to S$1.07 on Wednesday after the group defended its financial statements against the claims by Iceberg, helping the company to regain some of the S$1.05 billion in market value that had been wiped off.
Even so, investors may still remain cautious, said OCBC analyst Carey Wong. "We also note that Iceberg intends to issue more reports on Noble and that could continue to cast a near-term pall over the stock."
Iceberg Research, a little-known research firm, on Sunday published a 17-page report that accused Noble of exploiting accounting loopholes to "fabricate profits".
It questioned Noble's treatment of certain companies such as Australian coal miner Yancoal as associates, and said that the practice "grossly overstated" the value of these companies.
It also alleged that the recovery of Noble Agri's business was "manufactured" through accounting manoeuvres.
Noble rejected these claims in a three-page statement on Tuesday.
"The carrying values of our associates, including Yancoal, are tested for impairment using discounted cash flow models that are updated every quarter. As is always the case these valuations are currently being audited as part of the FY2014 audit," it said.
The group added that its financial statements are reported in accordance with International Financial Reporting Standards, and were audited by Ernst & Young (EY).
EY declined to comment, citing client confidentiality.
Noble said that its statement, which rebutted most of the claims made by Iceberg, "is not intended to be exhaustive".
Iceberg plans to release two more reports on Noble, focusing on the fair values of its continuing operations and operating cash flow, and its debt level respectively. It said it has no short position in Noble, and has not sold any of its reports on the firm.
But it intends to short-sell companies in future coverage, and hopes to gain attention through its coverage of Noble.