Noble saga: Ball is in regulators’ court; Noble’s AGM raises further concern; Noble AGM: shareholders may not be so supportive next time; Chairmen should take shareholder questions in the spirit of the law

Noble saga: Ball is in regulators’ court

Michael Dee

21 April 2015

Business Times Singapore

A HEADLINE in The Business Times on Saturday reads: “Noble dodges accounting queries at AGM”. For 90 minutes, Noble Group founder and chairman Richard Elman “repeatedly dodged shareholders’ queries on the group’s accounting practices …”.

How can it be that for more than two months Noble continues to refuse to provide details of its finances to the owners of the business and show such disregard for their interests? Continue reading


Reality Check: Accounting Alerts Every Investor Should Know by Olstein Funds

Olstein Funds: Accounting Alerts Help Avert Trouble

An astute investor should be aware of the types of accounting smokescreens that companies use to disguise problems and to misrepresent the company’s economic reality. The following alerts are sometimes clear indicators of future earnings surprises and have proved valuable to investors:

  • Sizable negative divergences between cash flow and net income;
  • Questionable accounting for transactions with unconsolidated affiliates or joint ventures;
  • Prematurely realizing revenue that may not be sustainable;
  • Reversal of past reserves to artificially inflate earnings;
  • Realizing nonrecurring gains, and netting these gains to hide past mistakes;
  • Lowering discretionary expenditures to meet earnings targets;
  • Continual characterization of material expenses as nonrecurring;
  • Unrealistic depreciation schedules;
  • Capitalizing expenses based on unjustified optimism;
  • Serial acquisitions under purchase accounting that overstate internal earnings growth;
  • Lower inventory turns or negative inventory divergences;
  • Accounts receivable rising faster than sales; and
  • Unrealistic pension assumptions.