TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issu...
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Andrea Soh
12 June 2015
Shares in Noble Group have rebounded after its founder said the commodity trader will “right the damage” and do its best to restore the share value, even as a rating agency revised its outlook on Noble from “stable” to “negative”.
In his first public comments since Noble’s annual general meeting in April, Noble’s chairman Richard Elman appealed to shareholders and staff to be patient with the company.
The stock hit a new six-year low of S$0.63 on Thursday before surging to as high as S$0.715 in the afternoon after Noble released the letter.
It finally closed at S$0.705, still 9.3 per cent higher than Wednesday’s close. The most heavily-traded counter on the Singapore Exchange saw some 167.9 million shares change hands, four times the average trading volume over the past there months.
Mr Elman said the company has been “working vigorously” behind the scenes and is starting to make progress, despite its apparent silence.
“For those of you who know us, I would only ask you one thing, have a little confidence and patience in us,” he said. “We will right the damage and will use all our best efforts to recover the share value.”
The letter followed an open memo on May 29 by Michael Dee, a former Temasek senior managing director, to Noble’s staff to pressure its management to answer the questions that have been raised about the company.
Mr Dee later also called on Mr Elman to resign, saying that he had lost credibility with investors given the fall in its share price, compared to gains in the Straits Times Index, in the past five years.
Noble’s shares have plunged about 40 per cent since a little-known outfit, Iceberg Research, questioned its accounting practices. US shortseller Muddy Waters also later said that it had a short position on the stock.
On Thursday, ratings agency Standard & Poors revised its outlook on Noble from “stable” to “negative”, though it kept Noble’s rating at BBB-, the lowest investment grade.
Noble’s trading risk position had weakened due to the growth in fair value gains from long-term commodity offtake contracts over the past three years, said S&P analysts Cindy Huang and Apple Lo.
“In our view, the long-dated nature of these contracts creates a mismatch between profit recognition and cash realisation,” they said.
This mismatch also limits the visibility in analysing Noble’s cashflows. While the firm’s transparency and financial disclosure have improved, external parties will depend on “reliable and timely disclosure of such information” to assess its fair value changes and cash realisation, S&P said, lowering its score of the group’s management and governance from “satisfactory” to “fair”.
The contracts in question could also be affected by adverse market conditions, they added, though these risks are mitigated by an “adequate” level of risk management governance.
The ratings agency nonetheless affirmed Noble’s debt as investment grade, because “Noble continues to have good financial flexibility and ‘strong’ liquidity”, said Ms Huang.
Noble said in response that it will work to meet the criteria laid out by S&P to address the outlook revision, but is delighted that all three ratings agencies have affirmed its investment grade status.
“We have a very strong track record of securing funding and in early May we closed our major annual revolving credit re-financing with commitments of US$2.3 billion at the lowest funding spread in the history of the firm,” its CEO Yusuf Alireza said in a statement.
Earlier in the day, OCBC Investment Research cut its fair-value estimate of Noble’s shares from S$1.05 to S$0.61 amid the ongoing uncertainty and a weaker outlook for commodities. It maintained its “hold” rating.
It will take time for the company to regain the market’s confidence, said OCBC analyst Carey Wong.
“But more importantly, we believe that the recent pullback could be due to a weaker outlook for commodities, which comes on the heels of a ‘new normal’ for China, that is, slower economic growth.”
Concurring, Religare Capital Markets research director Nirgunan Tiruchelvam said the recent volatility in Noble’s shares is symptomatic of issues facing commodity traders in general.
Still, Noble will have to improve its disclosure, he told BT. “Investor confidence is dependent on more transparency.”