Singapore fines Noble for ‘misleading’ financial statements
Singapore has fined commodities business Noble Group S$12.6mn (US$9.1mn) for publishing “misleading information” in its financial statements, following an investigation that has taken almost four years to complete.
The announcement by the city-state’s accounting authority concludes its probe of a high-profile accounting scandal that brought Noble to the brink of collapse. It also flagged “stern warnings” given to two unnamed former directors of the group.
Noble’s near-collapse, from a business worth more than $6bn that had hoped to emulate industry giant Glencore, was precipitated by a series of highly critical reports on its accounting practices published in 2015 by short seller Iceberg Research.
By 2018, it had been forced into a painful debt-for-equity swap and a delisting, and it sold a number of key assets to help it survive. The saga also dented Singapore’s reputation as a commodities trading hub.
The fine, equivalent to 0.4 per cent of Noble’s reported revenues in 2020, was criticised by Iceberg. “A minor fine for a major [scandal],” it wrote on Twitter.
The improper accounting at Noble is one of a series of scandals in recent years that have raised questions about regulations in Singapore, which has sought to attract multinationals while promoting its strong “rule of law”.
A number of Singapore-based commodities groups have been at the centre of scandals in recent years, including Noble Group, Agritrade International, Hin Leong Trading, ZenRock Commodities Trading and Petro-Diamond Singapore.
Some have received hefty fines and executives have faced jail time. The billionaire founder of Hin Leong, Lim Oon Kuin, in 2020 confessed to hiding $800mn in losses at the Singapore-based oil trading firm he founded. Singapore police filed more than 100 charges against Lim last year while a former director and operations executive of ZenRock were charged last month with more than $105mn worth of dishonesty offences.
The problems make the case for a stronger regulatory framework and oversight of trading houses in Singapore’s small, open economy, say analysts. But Nirgunan Tiruchelvam, an analyst at Tellimer, said they did not seem to have dented corporate enthusiasm for Singapore.
“Singapore provides these companies with tax haven status and access to financiers, which these businesses are so dependent on,” he said.
“Singapore’s stock exchange [lost] credibility a long time ago,” wrote Iceberg. “The lack of enforcement means even Singapore companies prefer to list elsewhere.”
Loo Siew Yee, assistant managing director of the policy, payments and financial crime group at the Monetary Authority of Singapore, said measures taken by the authorities against Noble “demonstrates that MAS takes breaches of disclosure obligations seriously and will take firm action against persons found to have fallen short”.
Noble said it was pleased the investigation had been concluded, adding that its commodity trading business had been under new ownership and management since December 2018 and “has focused on the highest standards of corporate governance, reporting and transparency since then”.