Top Noble shareholder accused of inflating assets
SINGAPORE: Goldilocks Investment Co, a leading shareholder of Noble Group Ltd, has filed a suit with the Singapore High Court against the commodities trader and some of its former and current senior executives, alleging they inflated Noble’s assets.
“We have filed it,” said Daniel Chia, a Morgan Lewis Stamford lawyer who is representing Goldilocks, an Abu Dhabi Financial Group equity fund, late on Tuesday.
The move comes days after Singapore-listed Noble said it would not make the redemption payment for its US$379 million (RM1.48 billion) bonds that matured on Tuesday.
Noble is seeking a US$3.4 billion debt restructuring that is crucial for its survival.
Noble’s restructuring deal has been opposed by some bondholders and shareholders such as Goldilocks, which has an 8.1 per cent stake in the trading company.
In a filing to Singapore Bourse on Wednesday, Noble said its founder and chairman emeritus Richard Elman had resigned on Tuesday as a non-executive director. It gave no reason for the resignation of the 77-year-old executive.
Elman founded the company in 1986 and then rode a commodities bull run to build it into one of the world’s biggest traders.
Hong Kong-headquartered Noble has been negotiating a debtfor-equity swap for months after selling billions of dollars of assets, taking hefty writedowns and cutting hundreds of jobs over the past three years.
The suit alleges that some of the defendants “sanctioned aggressive revenue recognition and creative accounting policies in order to inflate the valuations of Noble’s ‘associate companies’ and long-term commodity contracts”.
“The objective of these overvaluations was to inflate Noble’s revenue and balance sheet,” according to a copy of the 72-page filing.
Noble confirmed it had been served a “writ of summons” by Goldilocks.
“The company is in consultation with its legal advisers in this regard and intends to vigorously resist any and all allegations or claims made against it,” said Noble.
Once Asia’s largest commodity trader, Noble was plunged into crisis in February 2015 when Iceberg Research questioned its books. Noble has stood by its accounting.