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Noble Group open to selling core businesses to boost confidence: CEO

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Embattled commodity merchant Noble Group is expanding its Singapore oil team to focus on growing regional demand despite a price rout that has hurt some companies trading crude oil and refined products.

[SINGAPORE] Noble Group is open to selling its core businesses, its chief executive said, as Asia's biggest commodities trader pursues options to boost market confidence after a bruising accounting dispute.

Yusuf Alireza told some 500 attendees at the Singapore-listed company's investor information day on Monday that Noble is evaluating a number of options both internally in terms of shutting down certain businesses, and externally such as working with banks and strategic investors.

"It's our responsibility to review all of those options including potentially selling businesses that in a normal time would be considered core businesses," Mr Alireza said.

He did not specify what businesses he was referring to as core. Noble's senior management made a 140-page presentation at the event as part of the company's attempts to improve disclosure and transparency.

Noble, already under pressure in a weak commodities market, hit the spotlight in February when blogger Iceberg Research alleged the company was inflating its assets by billions of dollars by not fairly representing the value of its commodity contracts.

Hong Kong-headquartered Noble has rejected the claims, and board-appointed consultant PricewaterhouseCoopers found no wrongdoing in a report published this month. But there's still some uncertainty on the company's unrealised commodity contracts, or mark-to-market.

"The MTM review is only a small part of the issues they face. Their balance sheet has billions in investment in associates, receivables, inventories, etc, where the accounting can have a big impact on the income statement," Mak Yuen Teen, associate professor of accounting at the National University of Singapore Business School, said before Noble's investor day presentation.

"So, they really need a more thorough MTM review and a review of other significant items." With revenues of US$86 billion last year, Noble is one of Asia's largest companies to find itself in a reputational battle over accounts.

On Monday, its shares ended down 7 per cent, not far of seven-year lows hit last month. They are now down some 60 per cent since mid-February. Weak prospects of Noble's main commodities exposures - metals and energy - due to China's sputtering economy, are hitting investor confidence.

"I must also say that I've listened to some pretty wild stories about Noble during the last 25 years," Richard Elman, Noble's founder and chairman, said at the event.

"Some of the characterisation of Noble in recent times by people who have no knowledge of our industry, often have no professional qualifications to be commenting on areas they are not commentators on, has gone a little bit too far."