Noble’s accounts receive almost 100% shareholder backing

SINGAPORE — A majority of Noble Group’s shareholders have approved the company’s latest annual financial statements, providing solid backing to the commodities trader as it battles allegations of improper accounting made by Iceberg Research and United States short-seller Muddy Waters.

The resolution to approve its financial statements for 2014 was supported by 99.92 per cent of votes cast at Noble’s annual general meeting (AGM) of shareholders in Singapore yesterday. The other 10 resolutions tabled at the AGM were all passed. Shares of Singapore-listed Noble climbed 1 per cent yesterday to close at 88.5 cents in active trading, but remained well below the S$1.20 mark in mid-February, before the Iceberg claims and its earnings announcement.

The shares have slumped as much as 32 per cent, or S$2.5 billion in market value, in the wake of accusations by Iceberg that Hong Kong-based Noble had inflated asset values by billions of dollars through aggressive accounting. The decline was exacerbated by a US$240 million (S$322 million) fourth-quarter loss — its first quarterly loss in three years — that the company reported in late February.

Noble, which has repeatedly rejected Iceberg’s allegations, has linked the little-known company to an employee it fired in 2013 and started legal action in Hong Kong. It is seeking an injunction to prevent the defendants from publishing what it said was false information about Noble, as well as damages for conspiracy to injure the company.

The firm’s founder and chairman, Mr Richard Elman, 74, stepped up his defence yesterday as he addressed about 300 shareholders gathered at the Grand Copthorne Hotel ballroom for the AGM. “We are here to defend our people, our shareholders and we are here to right what is wrong. The Iceberg issue is finished. We have started legal proceedings and we look forward to challenging their inaccurate, unreliable and misleading claims in court,” he said.

“Our focus is firmly on running the business, to achieve our goal of becoming the leading mover of physical commodities in the world,” he added.

Noble’s focus is on shareholder returns via dividends and stock buybacks, chief executive Yusuf Alireza said at the AGM. “There’s no question that commodity markets have been challenging the past few years. Margins have been depressed … What matters is the bottom line and that’s what we will focus on,” he added.

Last week, Muddy Waters, a US investment research company known for its attack on Toronto-listed Sino-Forest Corp in 2011 and Singapore-listed Olam in 2012, joined in the criticism of Noble’s accounting and management as it declared a short position on the company. Noble denied the Muddy Waters allegations, too, while the Monetary Authority of Singapore said it was looking into the matter.

“Nothing we have done has violated accounting rules. I feel aggrieved about what happened in the last two months,” said Mr Elman, who is Noble’s biggest shareholder with about a fifth of its shares. Among other key shareholders, China Investment Corp, Templeton Investment, Eastspring Investments, Orbis Investment and INVESCO cumulatively own about 30 per cent of Noble, Thomson Reuters data showed.

The company has more than enough liquidity to cover any liabilities and a conservative debt maturity profile, Noble said yesterday, reiterating earlier comments.

Proxy adviser Institutional Shareholder Services, which has criticised the composition of Noble’s audit committee, said on Monday that there was no evidence indicating that the company’s auditor had rendered an inaccurate opinion. Both leading rating agencies, Moody’s and Standard & Poor’s, have also maintained their credit ratings for Noble, it noted.

Still, Noble has to win over investors and shareholders as it tries to recover from the reputational damage inflicted in the past few months.

The company needs to do a lot more to improve its transparency, said influential shareholder activist, Mr Mano Sabnani, who was at the AGM. That would help investor confidence, he said. AGENCIES, WITH ADDITIONAL REPORTING BY ANGELA TENG