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SINGAPORE mainboard-listed Noble Group's stock sank on Wednesday as news broke of a lawsuit filed by former CEO Yusuf Alireza against company founder and chairman emeritus Richard Elman over HK$450 million (S$79.2 million) in shares related to alleged contract breaches.
Mr Alireza, who was appointed CEO in 2012 but abruptly left the Hong Kong-based embattled commodity trader in May 2016, filed the suit with Hong Kong's High Court, according to a Bloomberg report published on Wednesday.
Noble is not named as a defendant in the writ of summons, which mainly lays out claims against Mr Elman, the trader's largest shareholder with an 18.5 per cent stake.
According to the writ, Mr Elman gave Mr Alireza six months' notice of termination after the latter raised "concerns over the future viability" of Noble Group and made various recommendations in May 2016.
Mr Alireza claims he had a deal that would have seen him receive about 63.9 million fully-paid shares in Noble for starting work at the company, and an additional 52.3 million shares when his employment was terminated, but alleges those shares have not been transferred.
When contacted by The Business Times on Wednesday, Mr Elman's Hong Kong office said he would not be able to respond before press time.
Noble Group's stock fell 6.2 per cent to close at 30.5 Singapore cents, near the lowest since 2000.
The trader's shares have collapsed 83 per cent over the past year, extending the company's troubles since antagonist outfit Iceberg Research first raised questions about Noble's accounting methods in February 2015.
Iceberg's initial report accused Noble of having inflated its bottom line through over-bullish price projections, claims which Noble rejected and dismissed as work of a disgruntled ex-employee.
But the trader has since been hit by a series of setbacks, including significant losses, a collapse in its securities, downgrades to its credit rating and uncertainty over its ability to fund its debt.
Last year, Noble tried to reset its business with the sale of its US energy solutions unit after Mr Alireza left, an exit from European power and gas and a reduction in its metals business.
The company's market value has slumped to just over S$400 million from more than US$10 billion at the end of 2010.
Amid what appeared to be a worsening crisis, Mr Elman stepped down from his position as executive chairman last month, citing the need to make "changes to the board to ensure that it is 'fit for purpose' to oversee our emerging slimmer business profile".
Less than two weeks later, Reuters reported that Sinochem International Corporation was no longer pursuing an investment in Noble due to concerns over the finances and business outlook of the loss-making commodity trader, quoting three sources familiar with the matter.
Mr Alireza's lawsuit, which also names Fleet Overseas (New Zealand) Ltd as a defendant, is the second suit from a former Noble CEO. His predecessor, Ricardo Leiman, filed a lawsuit in Singapore five years ago over claims that US$12.9 million in bonus and rights to 67.7 million restricted shares and options in a trust had been wrongly withheld.
Noble has said that Mr Leiman was not owed compensation because he had been in discussions to set up a rival business while still on a US$350,000-a-year advisory contract with Noble.