Noble Group Ltd
  • Commodity trader fined $9 million for misleading information
  • Fine is largest ever in city-state’s history: MAS spokesperson

Local authorities of Singapore issued with a record fine to Noble Group Ltd., the commodity trader whose losses, spectacular collapse, court dramas and multibillion dollar restructuring dominated headlines in Singapore over several years, as investigations ended after a 45-month probe.

The Monetary Authority of Singapore imposed a civil penalty of S$12.6 million ($9 million) for publishing misleading information, the MAS, Accounting and Corporate Regulatory Authority, and Commercial Affairs Department said in a joint statement on Wednesday. A MAS spokesperson said separately in response to queries that it was the largest such fine in the city-state’s history.

An entity within the post-restructuring Noble Group is paying the civil penalty, on a “voluntary basis,” the MAS spokesperson said in the response. Half of it has already been paid, and the balance will be paid by Sept. 26.

After years of losses and allegations of illegal accounting, which the business denied, Noble Group, once Asia’s largest commodity trader with a market value of more than $10 billion, was forced to restructure. Many investors’ savings were lost as a result of the upheaval at the trader, which included operations ranging from coal to agricultural and brought in millions of dollars in legal fees.

Iceberg Research, a previously unidentified organization, promoted the claims that the company’s financial statements were inaccurate. Over time, it was discovered that Arnaud Vagner, a former worker for Noble Group, was responsible for Iceberg.

The fine “is a little small,” said Terence Chua, a senior research analyst at Phillip Securities Research Pte. “It sends a message but for investors, there’s not a lot of comfort because the money is lost and this took such a long time.”

The investigations revealed Noble Group and one of its units had applied an “incorrect accounting treatment” to several long-term marketing agreements with mine owners and coal producers, the authorities said. This “inflated” the reported profits and net assets of the company and its unit, they said.

“Materially false or misleading statements by listed entities have no place in Singapore’s capital markets,” said Loo Siew Yee, assistant managing director (policy, payments & financial crime), MAS. “If left unchecked, they will erode investors’ trust in the quality of information released by issuers, and have an adverse impact on the integrity of our capital markets.”

The Noble saga will not detract from Singapore’s status as a commodity-trading hub, according to Nirgunan Tiruchelvam, an analyst at Tellimer Ltd., who cited the city-state’s tax incentives and trading links. “Investors in commodity traders like Noble need to realize the fundamental risk,” he said.

Noble Resources Trading Holdings Ltd., the group that emerged after the initial company’s complex and drawn-out restructuring, said it welcomed the authorities’ announcement, according to a statement.