Noble dodges accounting queries at AGM

Singapore

AT Noble Group's annual general meeting here on Friday, shareholders hoping to gain clarity on the recent Iceberg Research saga were disappointed.

During the one-and-a-half-hour meeting, Noble's founder and chairman Richard Elman repeatedly dodged shareholders' queries on the group's accounting practices, and instead steered the AGM's focus to the resolutions on Noble's financial statements and the reports of its directors and auditors.

In mid-February, Iceberg Research launched a series of attacks on the accounting practices of Singapore-listed Noble Group, Asia's largest commodity trader by revenue. Muddy Waters - the short-seller famed for its 2012 attacks on commodity group Olam International - followed suit in early April, issuing a "short" position on Noble.

Despite Noble refuting both allegations, coupled with an aggressive share purchase programme led by the group's management, Noble's shares have taken a beating. Since Feb 15, the day Iceberg launched its first attack, the firm's share price has plunged about 27 per cent to S$0.885.

Mr Elman, 74, who founded Noble in Hong Kong in 1986 and is its largest shareholder, said at the AGM's opening: "We consider the Iceberg matter finished. We have started legal proceedings and look forward to challenging their inaccurate, unreliable and misleading claims in a public court."

He added: "We will not be revisiting details of these allegations at this meeting."

But his demeanour repulsed more than a handful of shareholders, who described his attitude as "unnecessarily defensive" and "in denial mode".

When a shareholder, who identified himself as Chua, asked Noble to elaborate on plans to be "more transparent", Mr Elman said the management "will only answer questions that are relevant to the resolution at hand".

Likewise, when another shareholder, Richard Lau, 66, queried Noble's management on its methodologies of valuing its stake in Australian coal company Yancoal - a key feature in Iceberg's allegations - Mr Elman once again avoided the question.

This prompted shareholder Mano Sabnani to intervene. He told Mr Elman: "I think it is in order to ask about Yancoal. Why are you not answering? . . . If you are not guilty of anything, why are you so uptight?"

Mr Elman relented in response. "Let's have the Yancoal question," he said.

In its reports, Iceberg had queried why Noble was valuing its 13 per cent stake in Yancoal at US$322 million, when the stake was worth only US$10 million. At Friday's AGM, Noble's CEO Yusuf Alireza said the group uses a very specific third-party cashflow model used by many mining companies to value its assets, which is all audited by Ernst & Young.

Mr Alireza's response failed to convince Mr Lau, who told BT after the AGM that "(Noble's management) weren't very detailed in answering their methodologies". But he intends to retain his stake in Noble for the long run. "They are in a good sector of the business. It's just that, lately, they might have enemies trying to disrupt the company," he said.

Having held Noble's shares for over a decade, Mr Lau added that the firm's share price is "so depressed now, it's no point (to sell)".

Some shareholders voiced their support for the company, and affirmed their trust in its management. With an improving US economy, 2015 has also been much better for Noble's business than the year before, Mr Elman said. Meanwhile, Mr Alireza maintained that the company's focus remains on improving profitability and transparency.

All 12 resolutions were passed at the AGM, including one that approved Noble's FY14 audited financial statements.

READ MORE: Iceberg hits out at Noble after AGM