BARELY hours after Noble issued an open letter to Michael Dee, the former chief executive for South-east Asia at Morgan Stanley has replied to the commodities firm, saying that "the only answer (Noble has) given is a denial with no detail".
He urged the company to go beyond letters drafted by Noble's public relations (PR) team and "really speak to shareholders, debt holders and employees, and explain (the group's) position".
Said Mr Dee: "I only am interested in the facts and am willing to change my opinion based on real facts and not a letter drafted by Noble's PR team. I write every word myself. I do my own analysis. My views are mine and mine alone. If I am presented information that changes my views I will be the first to change.
"Nothing in Noble's letter rises to the level needed to erase my concerns. Noble have had two months to respond to me, yet I am responding in one hour to their letter."
Indeed, apart from picking apart specific points Noble had raised in its open letter, Mr Dee took issue with the company's delayed response.
Said Mr Dee: "When I challenged Olam the CEO was the first to call at 5.30am (and) he earned my respect for that. This is not about me because I have no stake in this at all. It is about those shareholders and employees who have no voice and yet who want answers."
Before the market opened on Wednesday morning, Noble had posted a four-page open letter to Mr Dee - signed by its chief executive Yusuf Alireza - on the Singapore Exchange (SGX) announcements platform. It also posted a media release summarising Mr Yusuf's views.
In his rebuttal to Noble's letter, Mr Dee questioned how Yancoal can be considered an associate company, since Noble only owns 13 per cent of it (instead of the required 20 per cent).
"How is that consistent with accounting standards and market practice? If you are so confident of your Yancoal book value release the full model, with all its assumptions, both before and after you recently wrote it down 40 per cent. Let the market decide if your assumptions that it is worth 30 to 50 times the market value are realistic and if Yancoal is worth what you say. You ask us to believe all your mark-to-market valuations yet you will not show us your work," said Mr Dee, asking Noble to release the full model.
He again asked Noble to answer his question on how many inventory sales the firm has done in the past three years, and how many times it has not repurchased them. "My working hypothesis is that virtually every time you have repurchased them," said Mr Dee.
In its media release on Wednesday morning, Noble had said that it does not have off-balance sheet repurchasing agreements, known as repos, but uses optional inventory sales "on a limited basis" which are not recognised as repos under accounting rules. It was replying to Mr Dee's open letter to Noble's shareholders on May 29, in which Mr Dee pressed the management for answers to criticisms raised.
The former Temasek senior managing director also asked Mr Alireza how much stock he has personally bought.
"I haven't seen your filings on the SGX website. I haven't seen you stepping up to the plate with your wallet. You get your enormous share position given to you from the shareholders. Show us your confidence in Noble and start buying with your personal funds. Do it until it hurts. Put your skin in the game. Until you do your letter is just empty words."
Ending his letter, Mr Dee said: "Only the truth and facts and details will suffice at this stage. Your best defence is not wasting the shareholders cash on futile buybacks but rather explaining your position. That you haven't been able to achieve this convincingly for the last four months tells us all we need to know."
Noble's shares have been under pressure since February, following questions raised by critics about its accounting practices. The group came under intense scrutiny after a little-known research firm, Iceberg Research, claimed that the commodity group's assets were inflated.
The mainboard-listed shares have lost about half their value after Iceberg's first report; the stock has slumped more than 40 per cent since then, and is now trading at lows not seen since over five years ago.
Noble shares were last traded at 71.5 Singapore cents as at 2.07pm; Iceberg's price target for Noble is 10 Singapore cents a share.