'I was vindicated a long time ago,' says Iceberg's Arnaud on Noble probe

Iceberg Research's Arnaud Vagner ought to be having his moment now, after three years of tirelessly slamming the Noble Group and being called a "disgruntled" ex-employee (a label he disputes).

Now that Noble's relisting has been called off on the back of a probe by the Singapore authorities into uncertainties in its financial position, the French national appears more pleased about being able to move on and "expose" other targets.

Asked by The Business Times what was next for him, he replied in the phone interview: "The next step now is to do my job with other companies ... move on from this very time-consuming story."

He said that the ongoing, unprecedented probe into the Noble also "opens the door" for the legal challenge being organised by Iceberg Research against Noble to take place in Singapore instead of in the UK.

"It's something for the lawyers to decide...whether to come to Singapore or not. UK still remains an option," he said.

He admitted, however, that although he would prefer to spend more time on other companies from hereon, the chapter on Noble may "never completely close" - in that his assistance may be required in future law suits or other related developments.

"We will go on to expose fraud and take short positions, although Iceberg did not short Noble stocks," he said.

Noble has largely been in Iceberg's crosshairs since 2015, when it first issued a report attacking the commodity trader's accounting practices, but two other companies have also drawn its scrutiny.

They are Hong Kong-listed brewer Tibet Water Resources and US-listed construction firm Tutor Perini, which have lost more than 30 per cent and 40 per cent respectively since Iceberg Research iniated coverage and flagged their weaknesses.

But that pattern was more stark with Noble, the financials of which have markedly languished since Iceberg Research first slammed its practices three years ago, wiping out a market value of over S$10 billion in the stock.

Last month, the counter was suspended to make way for the relisting of "New Noble" - the final piece of a hard-fought US$3.5 billion debt-revamp plan.

The relisting has now been blocked by Singapore regulators, given the "significant uncertainties" on the revamped firm's financial position.

Noble and its unit are the subject of investigations by the Monetary Authority of Singapore, the Commercial Affairs Department (CAD) of the Singapore Police Force and the Accounting and Corporate Regulatory Authority (Acra) for potential breaches of securities and company laws.

Mr Vagner, who has resided in Hong Kong for the past 15 years and is a permanent resident there, said he partly blamed the regulators here for the Noble scandal, which has bruised market sentiment and led many to suffer losses on their investments.

"If a stock exchange regulator doesn't make investors comfortable, they won't come and then, valuations will be low. If valuations are low, companies don't come," he said.

Others expressed frustration at the timing of the investigations, so close to the relisting of New Noble shares before the authorities put a stop to it.

One party close to a group of Noble shareholders said: "Shareholders had a small chance to recover their investments with the relisting, but now, we doubt anything will be left for them. Where were the regulators during all the drama earlier?"

On its part, the Singapore authorities said that since allegations were made by various parties in 2015, they have been tracking Noble - gathering and reviewing information, including that on Noble's substantial write-downs in 2017 and 2018.

Following this monitoring, "overt investigations" were opened.

Mr Vagner is surprised that despite Noble's troubles, there were still hopefuls that the revamped entity - if the relisting had been given the go-ahead - could eventually bring some cheer.

He said: "With everything that has happened, there are still believers and it's remarkable. There will always be some people who will believe in anything - whatever happens.

"In any form and post-whatever, Noble is not viable. New Noble's interest cost is very high and it can't have this as the commodity-trading business requires small margins. It can't be competitive if key costs are high.

"I know this because I was a commodity banker and used to work for Noble.

"But there are still people who believe in Noble. It's mathematically impossible for it to succeed."

In light of the latest move by the authorities to block the listing of New Noble, Noble said on Friday that after consulting the Ad Hoc Group, its board was intent on pushing through with the restructuring - but sans the listing of New Noble, and that it may consider doing this through a "court-appointed officer".

Noble's circular to shareholders had mentioned an "alternative restructuring", under which the company would file for administration in Britain.

With this, creditors or any other potential buyer as determined by the administrator could take control of the company's assets; equity investors and perpetual bond holders would be wiped out.

Mr Vagner pointed out that in the event the company files for administration, it could prove to be a challenge to push ahead with its restructuring agenda because it may no longer have control over the process.

He had worked at Noble between March 2011 and June 2013, and was a senior credit analyst when he was fired following a disagreement with his immediate boss.

He launched Iceberg Research in 2015, and in the early days of his attacks against Noble, had been labelled by his ex-employer as "disgruntled".

Unlike traditional whistleblowers with access to information, he said he had started "digging" into Noble long after he had left the firm, after someone drew his attention to valuations involving Australian-listed coal miner Yancoal, a company in which Noble had a stake.

"I started with that and we spent months analysing this thing and progressively discovered what we did," he recalled.

He has since coughed up more than HK$3 million (S$525,000) in legal fees which "adds up daily" to fight Noble's ongoing suit against him.

Having remained anonymous to the public for much of that time up until this year, when he dropped his cover, he said:

"In the beginning, the idea was to focus on the report, not who was behind it. If two plus two is four, it doesn't matter who said it. So it was best to focus on the arguments."

Even with the probe ongoing and its outcome nowhere certain, does he feel somewhat vindicated?

He replied: "I was vindicated a long time ago - when Noble started to recognise the write downs."

Anita Gabriel

08 December 2018