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Singapore regulators won't let Noble re-list, citing potentially inflated assets
THE Monetary Authority of Singapore (MAS) and Singapore Exchange Regulation (SGX Regco) have decided not to allow Noble Group (NGL) to transfer its listing status to New Noble as part of NGL’s proposed restructuring, MAS, SGX Regco and the Singapore Police Force said in a joint statement on Thursday.
"MAS and SGX RegCo have concluded that there are significant uncertainties about the financial position of New Noble. It would be imprudent to allow the re-listing as investors will not be able to trade in New Noble’s shares on an informed basis," they added.
The announcement comes after a “careful review” of the findings thus far into NGL and Noble Resources International (NRI), carried out by MAS, the Commercial Affairs Department (CAD) and the Accounting and Corporate Regulatory Authority (ACRA).
Last month, the authorities stunned the market with the news that the commodities group is being probed for potential breaches of securities rules and company law.
In the statement on Thursday, the authorities said that they have, since 2015, been carefully reviewing the allegations raised by various parties against NGL and following up on information and leads provided. Despite the clean audit opinions issued by NGL’s statutory auditors for financial years ended 31 December 2014, 2015 and 2016, the authorities continued to gather and review information. This included information relating to substantial write-downs announced by NGL in late 2017 and early 2018, prompting the authorities to start "overt investigations" into potential breaches of Singapore’s laws.
Simulated financial statements submitted by NGL to SGX RegCo show that the net asset value (NAV) of New Noble as at 31 December 2017 could be adjusted downwards by about 40 per cent, and that the NAV as at 31 March 2018 could be adjusted downwards by about 45 per cent. "These adjustments would be in addition to the write-downs of more than US$2 billion already made by NGL in FY2017," they highlighted.
There could be even further reductions in New Noble’s NAV arising from investigations by CAD and MAS that extend beyond potential non-compliance with accounting standards highlighted by ACRA in a letter to NRI dated 20 Nov this year.
CAD and MAS are looking into other relevant areas in connection with the preparation and disclosure of NGL’s financial statements, including valuation of commodity contracts and other related assets. The findings arising from these investigations could potentially lead to a further erosion of New Noble’s NAV.