Muddy Waters bets against Noble Group

Bloomberg

Fri, Apr 10, 2015 - Page 15

Muddy Waters LLC, the research firm founded by short-seller Carson Block, published a report questioning Noble Group Ltd’s cash flow and management, adding its weight to recent criticism of the commodity trading company’s finances.

Noble, Asia’s largest commodity trader by revenue, rejected the US researcher’s allegations in a statement to the Singapore stock exchange.

“The company is studying the report in detail,” Noble said.

Noble shares fell as much as 9.3 percent yesterday, to the lowest since September 2013. The stock was down 5.5 percent at S$0.865 as of 2:09pm yesterday.

Muddy Waters’ report follows the critique of Noble’s finances and accounting practices by an anonymous group that calls itself Iceberg Research.

Noble’s stock had declined 24 percent at the close of trade on Wednesday, following the Feb. 15 publication of the first of three Iceberg reports.

Hong Kong-based Noble has also rebutted Iceberg’s reports as inaccurate, and begun legal action in Hong Kong’s High Court against Arnaud Vagner, a former employee it said is behind the reports.

Muddy Waters, which cites some of the issues raised by Iceberg, said the anonymous group had no involvement in its report and was not given advance knowledge of its publication.

Muddy Waters also said it was not involved in Iceberg’s research on Noble.

In addition to researching the company’s finances, Muddy Waters said it enlisted Qverity Inc to analyze the trading company’s management.

Qverity is founded and staffed by former members of the CIA, according to its Web site.

Carson Block has led Muddy Waters to challenge the finances of more than a dozen companies, mostly in Asia. His most high-profile attacks include a 2011 report on Sino-Forest Corp (嘉漢林業). That resulted in a Canadian probe of the Chinese company, which filed for bankruptcy a year later.