MAS slaps Noble Group with $12.6m civil penalty over SFA breach

Two former directors of the group’s subsidiary also received warnings from authorities.

Noble Group Limited (NGL) was slapped with a $12.6m civil penalty by the Monetary Authority of Singapore (MAS) for publishing misleading information in its financial statements.

In an announcement, MAS said NGL was found guilty of violating section 199(b)(ii) of the Securities and Futures Act (SFA).

Apart from a civil penalty, two former directors of NGL's subsidiary, Noble Resources International Pte Ltd (NRI), also received stern warnings from the Accounting and Corporate Regulatory Authority (ACRA) for breaching section 201(2) of the Companies Act (CA).

The former directors failed to prepare and table annual financial statements in compliance with the prescribed accounting standards in Singapore said MAS.

The joint investigation on NGL, which commenced in November 2018, found that the group and its subsidiary “applied an incorrect accounting treatment” to the term marketing agreements it entered with mine owners and coal producers to either “assist them to build a brand name for their mines or act as a salesperson for the commodities produced from the mines.”

According to the result of the investigation, NGL and NRI classified the agreements as “financial instruments instead
of service contracts.”

The group also recognised future fees from these agreements before rendering the services.

“This inflated NGL’s and NRI’s reported profits and net assets. NGL’s publication of materially misleading financial statements from 2016 to 2018 was likely to have induced the sale or purchase by investors of NGL’s securities listed on the Singapore Exchange (SGX),” MAS explained.