SINGAPORE: Singapore's central bank and exchange regulator have barred commodities trader Noble Group from transferring its listing status to New Noble as proposed under its restructuring plan.
The decision follows a "careful review" of the findings from the ongoing investigations into Noble Group and and its wholly owned subsidiary by the Monetary Authority of Singapore (MAS), the Commercial Affairs Department (CAD) and the Accounting and Corporate Regulatory Authority (ACRA), said the police, MAS and Singapore Exchange Regulation (SGX Regco) in a joint statement on Thursday (Dec 6).
"MAS and SGX RegCo have concluded that there are significant uncertainties about the financial position of New Noble," the authorities said.
"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. MAS and SGX RegCo will therefore not allow the re-listing of New Noble to proceed," they added.
Noble, once Asia's top commodity trader, has seen its market value all but wiped out from US$6 billion in February 2015 after its accounting was questioned by Iceberg Research.
To rescue itself, Noble has shrunk its business by selling billions of dollars of assets, taking hefty writedowns and cutting hundreds of jobs, while defending its accounting.
The company is also planning to transform into an Asia-focused coal-trading business and list the overhauled business.
This was thrown into doubt last month after the authorities announced that Noble Group was being investigated for suspected false and misleading statements, as well as breaches of disclosure requirements under the Securities and Futures Act.
The group's wholly owned subsidiary, Noble Resources International (NRI), was also under investigation for potential non-compliance with accounting standards under the Companies Act.
NOBLE GROUP SAYS INTENDS TO TAKE STEPS TO PRESERVE VALUE FOR STAKEHOLDERS
On Friday, the Noble Group released a statement saying that it intends to take steps to preserve value for stakeholders, including through implementation of restructuring by an alternative process following the decision by the Singapore authorities.
"The Board regrets that after almost 19 months of engagement with its stakeholders, including shareholders, creditors and regulators, it has been informed that MAS and SGX Regco have decided not to allow the Company to transfer its listing status to New Noble as part of the restructuring," it said.
"During this period, the company has sought and obtained all necessary shareholder and creditor approvals, as well as obtaining the sanction of the English Court and the Bermuda Court for the Schemes, and recognition of the English Scheme in the US under Chapter 15 of the US Code."
It added: "While this is a very disappointing development in this protracted process, the Board, having consulted with the Ad Hoc Group, intends to preserve value for all stakeholders by completing the restructuring in the form set out in the Circular and the Explanatory Statement, other than the transfer of the company’s listing status.
"In doing so, the Board, in discharging its fiduciary duties, may implement the restructuring through a court-appointed officer."
The authorities said in the press release on Thursday that they have been carefully reviewing since 2015 the allegations raised by various parties against Noble Groupand following up on information and leads provided.
Despite the clean audit opinions issued by Noble Group’s statutory auditors for financial years 2014, 2015 and 2016, the authorities continued to gather and review information, including data relating to substantial write-downs the company announced in late 2017 and early 2018.
These provided the basis for authorities to start investigations into potential breaches of Singapore's laws, they said.
During the investigations, Noble Group submitted to SGX RegCo a set of simulated financial statements to illustrate the effect on New Noble’s financial statements after considering the potential non-compliance with accounting standards highlighted by ACRA.
According to the simulated financial statements, the net asset value (NAV) of New Noble as at Dec 31, 2017 could be adjusted downwards by about 40 per cent.
The NAV as at Mar 31, 2018 could be adjusted downwards by about 45 per cent, according to the news release.
These adjustments would be in addition to the write-downs of more than US$2 billion already made by Noble Group in FY2017.
There could also be further reductions in the value arising from further investigations beyond non-compliance with accounting standards.
READ: Fighting to survive: Noble Group's fate hangs on investors restructuring vote
There are also other areas in connection with Noble Group’s financial statements, including valuation of commodity contracts and other related assets, that MAS and CAD are looking into, they said.
"The findings arising from these investigations could potentially lead to a further erosion of New Noble’s NAV," read the press release.