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Hold those that talked up Noble as an investment responsible
HAVING spent almost four years warning about the likely fraud at Noble it was utterly depressing reading analyst Nirgunan Tiruchelvam's mea culpa ("Failure to recognise vulnerabilities behind my error in Noble", BT, Dec 10).
I personally watched him support Noble Group over and over again on CNBC, in The Edge and on many other news outlets. Even as Noble's share price continued its dramatic descent he continued to promote investment in Noble.
I personally shared with him multiple times my analysis why I believed he was wrong.
I hold him, and virtually every other research analyst who covered Noble, accountable for the thousands of retail investors who lost their savings because they trusted their research opinions.
One wonders how many investors heard our warnings but didn't heed them because of the analysts' views pushed by brokers and the media.
I was an investment banker for over 30 years and saw firsthand how CEOs/CFOs pressure banks and their analysts to provide positive coverage in return for future business.
Noble represents the collapse of the financial ecosystem built to provide investors with protection from unscrupulous participants.
Sadly financial crime is rampant today with retail most at risk. It is high time major investors such as Temasek, and the political class, join together to demand regulators investigate the research analysts who covered Noble to determine if they were ignorant, lazy, complicit and/or corrupt.
Financial markets are built on a foundation of trust and Noble shows that in this case not one of the research analysts, nor the banks they work for, were worthy of that trust.
The Monetary Authority of Singapore and Singapore Exchange need to ensure research is independent, professional, and prepared with integrity. Analysts and banks that sold the securities should also be held responsible.
- The writer was formerly regional CEO for Morgan Stanley and a Senior Managing Director at Temasek Holdings. He has never had a financial position in Noble Group.