Noble - too much faith in a 'clean' audit?

SINGAPORE authorities finally took action on Tuesday to probe locally listed Noble Group, more than three years after the first reports of accounting irregularities surfaced at the Hong Kong-based commodities trader.

Explaining why it took three years before they commenced investigations, Singapore's white-collar crime buster Commercial Affairs Department (CAD), the Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (Acra) said there had been no reasonable grounds to move in, until recently.

This does not mean they have not been doing anything. The three bodies had been working together since 2015, when Iceberg Research first flagged potential irregularities and questionable accounting practices at Noble, and when US short-seller Muddy Waters weighed in, questioning Noble's finances and unsustainable debt levels. All allegations and claims were denied by Noble, which boasted of clean audit opinions issued by auditors from 2014 to 2016. While regulators maintained they still reviewed allegations raised by various parties against Noble, and followed up on information and leads provided, the group's clean audits appeared to have been a factor that gave pause to any decision to undertake a more overt probe in the absence until recently of more information.