Asia commodity traders: What next for Noble Group – and Singapore?
The decision of Singapore regulators not to allow Noble to re-list wrecks a 19-month restructuring process and points towards insolvency.
Tuesday, December 11, was going to be a big day for creditors of Noble Group, and observers of the Singapore-listed commodity trading company generally: it was the revised deadline day for its proposed $3.5 billion restructuring, among the most complex ever attempted in Asia.
It won’t matter now. It will pass without consequence. Because on Thursday, the whole grand conceit was torpedoed by the joint forces of the Monetary Authority of Singapore (MAS), Singapore Exchange Regulation (SGX RegCo) and the Singapore Police Force.
Central to the whole restructuring had been a listing in Singapore of what was known as New Noble, the post-restructured organization. Thursday’s statement announced that Singapore was not willing to let it do so.
All of Noble Group’s problems stem from allegations that it was mis-valuing contracts in accounts, allegations that came from Iceberg Research, a company subsequently linked to Noble former employee Arnaud Vagner.
Thursday’s joint statement refers to a set of simulated financial statements Noble Group submitted to SGX RegCo to illustrate the effect on the New Noble group’s financial statements after considering potential failures to comply with accounting standards.
These simulated statements, from Noble itself, show that the net asset value (NAV) of New Noble could be adjusted downwards by 40% as of December 31, 2017, and 45% for March 31, 2019 – in addition to more than $2 billion of write-downs Noble had already made in its 2017 financial year.