Month: June 2015

Michael Dee unconvinced by Noble’s response; issues reply to firm; “You ask us to believe all your mark-to-market valuations yet you will not show us your work. Only the truth and facts and details will suffice at this stage. Your best defence is not wasting the shareholders cash on futile buybacks but rather explaining your position. That you haven’t been able to achieve this convincingly for the last four months tells us all we need to know.”

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http://www.businesstimes.com.sg/companies-markets/michael-dee-unconvinced-by-nobles-response-issues-reply-to-firm

http://www.ft.com/intl/fastft/346191/noble-group-michael-dee-tit-tat-continues

Michael Dee unconvinced by Noble’s response; issues reply to firm

Kelly Taykellytay@sph.com.sg@KellyTayBT

Latest: Goldman downgrades Noble to neutral; cuts target to S$0.77

BARELY hours after Noble issued an open letter to Michael Dee, the former chief executive for South-east Asia at Morgan Stanley has replied to the commodities firm, saying that “the only answer (Noble has) given is a denial with no detail”. He urged the company to go beyond letters drafted by Noble’s public relations (PR) team and “really speak to shareholders, debt holders and employees, and explain (the group’s) position”.

Said Mr Dee: “I only am interested in the facts and am willing to change my opinion based on real facts and not a letter drafted by Noble’s PR team. I write every word myself. I do my own analysis. My views are mine and mine alone. If I am presented information that changes my views I will be the first to change. “Nothing in Noble’s letter rises to the level needed to erase my concerns. Noble have had two months to respond to me, yet I am responding in one hour to their letter.” Continue reading →

AirAsia Under Pressure As Accounting Questioned; Stock slumps 20% as accounting practices come under fire, adding to concerns about a weak ringgit

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http://online.barrons.com/articles/airasia-under-pressure-as-accounting-questioned-1434431077

AirAsia Under Pressure As Accounting Questioned; Stock slumps 20% as accounting practices come under fire, adding to concerns about a weak ringgit.

ROBERT GUY

June 16, 2015

It’s been a tough six months for AirAsia chief executive Tony Fernandes as he’s grappled with the tragic aftermath of the crash of flight 8501, which plunged into the Java Sea off Indonesia just after Christmas. Having worked hard to contain the damage to the reputation of the Malaysian airline which over the past decade forged a reputation as a pioneer of low cost airline travel across Asia, Fernandes now confronts a new challenge threatening the company’s reputation – questions about its accounting practices. Continue reading →

Here’s Why Ezra and Noble Group May Actually Deserve Their Shocking Price Declines

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https://www.fool.sg/2015/06/15/heres-why-ezra-holdings-limited-and-noble-group-limited-may-actually-deserve-their-shocking-price-declines/

Related: Helping Other CEOs Avoid Bad Press: Social Exchange and Impression Management Support among CEOs in Communications with Journalists: Link

Here’s Why Ezra Holdings Limited and Noble Group Limited May Actually Deserve Their Shocking Price Declines

By Chong Ser Jing – June 15, 2015 | More on: 5DNES3N21^STI

Offshore support services provider Ezra Holdings Limited (SGX: 5DN) and commodities trader Noble Group Ltd (SGX: N21) have received lots of attention from market participants as a result of their stunning price declines. Over the past 12 months, Ezra’s shares have sunk by nearly 75% in price while Noble’s shares have lost half their value. It’s been a painful experience for investors in the companies, to say the least. To add insult to injury, the SPDR STI ETF (SGX: ES3) – an exchange-traded fund tracking Singapore’s market benchmark the Straits Times Index (SGX: ^STI) – has inched up by 1.2% over the same period.

The finger of blame

This disparity between the performance of the two shares and the broader market have resulted in some pointing the finger of blame at short-sellers as culprits for the price declines. At first glance, there are merits to the accusations. In an article published in the Straits Times today titled “The long, vice-like arm of short sellers”, renowned financial journalist Goh Eng Yeow wrote that Ezra and Noble are “two of the most heavily shorted firms on the local bourse.” Goh also gave some good statistics on how the percentage of shares out on loan for both Ezra and Noble, “presumably to short-sellers,” had grown markedly over the past year: Ezra’s shares out on loan had grown from 2.9% in July to 11.2% currently. As for Noble, the selfsame figure had ballooned from near-zero to nearly 6% over the same period.

But, I’d like to suggest that it may not be the short-sellers who are causing the price declines. Sure, the short-sellers may have been catalysts for the painful drops, but their actions are a possible manifestation of a bigger issue: Both Noble and Ezra’s business performance have been dreadful over the past six years since 2009. Continue reading →

Toshiba accounting scandal snowballs to 24 cases, ¥54.8 billion ($444m); Head of Japan stock exchanges ‘ashamed ‘ over Toshiba woes

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http://www.japantimes.co.jp/news/2015/06/13/business/corporate-business/toshiba-accounting-scandal-snowballs-to-24-cases-%C2%A554-8-billion/#.VXz_v_mqpBd

Toshiba accounting scandal snowballs to 24 cases, ¥54.8 billion

JIJI

JUN 13, 2015

Toshiba Corp. has discovered 15 new cases of inappropriate accounting and estimates that the electronics group will have to revise past operating profits by ¥3.6 billion. The latest findings from Toshiba’s internal investigation have brought the number of accounting irregularities to 24 and the size of its operating profit corrections to ¥54.8 billion, according to the firm’s announcement Friday. Continue reading →

SEBI Comes To Rescue Of Punters In “Rakesh Jhunjhunwala Surana Solar Scam”

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http://rakesh-jhunjhunwala.in/sebi-comes-to-rescue-of-punters-in-rakesh-jhunjhunwala-surana-solar-scam

SEBI Comes To Rescue Of Punters In “Rakesh Jhunjhunwala Surana Solar Scam”

Jun13th
20153 CommentsWritten by Arjun

SEBI is hot on the heels of the operators who engineered the alleged “Rakesh Jhunjhunwala Surana Solar Scam”. As an interim measure, stock exchanges have been directed not to make any payout for the transactions effected in the scrip

The “Rakesh Jhunjhunwala Surana Solar Scam” will go down in history as one of the simplest scams enacted. An operator bought a chunk of shares of Surana Solar Ltd, a little micro-cap, in the name of “Rakesh Jhunjhunwala”, the Badshah of Dalal Street. As soon as the news was made public, there was frenzy amongst the punters to grab the stock. This sent the stock price surging to an all-time high of Rs. 63. At this stage, the operator dumped his holding of the stock, leading to abnormally high volumes on the exchanges. Later, when news leaked that the “Rakesh Jhunjhunwala” who had bought the stock in the first place is not the Badshah of Dalal Street but a namesake, the stock price plunged to a low of Rs. 32. Continue reading →

GMT Research report questions AirAsia accounting practices

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http://www.reuters.com/article/2015/06/12/malaysia-airasia-accounts-idUSL3N0YY32X20150612

https://gmtresearch.com/research/airasia/

Fri Jun 12, 2015 7:32am EDT

GMT Research report questions AirAsia accounting practices

KUALA LUMPUR, JUNE 12 | BY YANTOULTRA NGUI

Hong Kong-based GMT Research has issued a report questioning airline AirAsia Bhd’s accounting practices, accusing it of using transactions with associate companies to boost its earnings, according to a copy obtained by Reuters. The report was issued on June 10 to GMT’s subscribers and since then shares in the low-cost carrier have lost 14 percent or 812 million ringgit ($215 million) in market value. “We are in discussions with the company about our concerns,” GMT’s founder Gillem Tulloch said in a statement on the research house’s website. Continue reading →

Noble Shares Resume Slide Amid Accounting Questions

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http://www.wsj.com/articles/noble-finds-itself-short-of-confidence-1434106517

http://www.wsj.com/articles/noble-group-buys-back-shares-1434072321

Noble Shares Resume Slide Amid Accounting Questions

Shares finished the week with a 3.5% decline

MIA LAMAR

Updated June 12, 2015 8:05 a.m. ET

HONG KONG—Efforts by Noble Group Ltd. to stem its sliding stock price were frustrated Friday as questions about its accounting practices continued to dog the embattled commodities trader. Shares finished the week with a 3.5% decline, bringing losses to 15% since Michael Dee, a former senior executive at Morgan Stanley and Singapore’s sovereign-wealth fund Temasek Holdings Pte. Ltd., two weeks ago emerged as Noble’s latest critic and helped to spark a renewed decline in the stock. Its shares are down 40% this year.

Questions raised by ratings firm Standard & Poor’s cast a pall over the company Friday, cutting short a startling stock surge on Thursday after Noble appealed for patience from its investors and employees and bought back millions of its own shares. S&P cut its outlook on the company’s debt to “negative” from “stable” while reaffirming its triple-B-minus rating, an investment-grade designation one level above junk territory. Continue reading →

Toshiba accounting irregularities fall into 2 cases; The problem centers on the percentage-of-completion method, used for long-term construction contracts

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http://asia.nikkei.com/print/article/99243

June 13, 2015 2:27 am JSTnny numbers

Toshiba accounting irregularities fall into 2 cases

TOKYO — Toshiba‘s iffy accounting came under a brighter spotlight Friday, when details on nine infrastructure-related projects with inflated profits were made public. Half of the profit inflation on a yen basis was posted for fiscal 2013, while many cases already had indications of possible future problems at the time of the order or relied on unrealistic cost-cutting plans. These details all point to lax bookkeeping under increased pressure to make budget or earnings targets.

The problem centers on the percentage-of-completion method, used for long-term construction contracts. Final profit margins and costs are estimated, and profit is accordingly posted for each accounting period. But such estimates tend to be subjective. Continue reading →

Stock manipulation: Dalal Street Investments; A perfect example of a pump and dump stock, Dalal Street Investments rose by 11600% and soon declined 97%

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http://www.moneylife.in/article/stock-manipulation-dalal-street-investments/42172.html

Stock manipulation: Dalal Street Investments

10 June 2015

Moneylife

A perfect example of a pump and dump stock, Dalal Street Investments rose by 11600% and soon declined 97%

Listed on the BSE in 2001, Dalal Street Investments (DSI) ostensibly deals in shares and securities. Over the past four quarters ended March 2015, DSI reported total revenue of just Rs19 lakh and a net loss of Rs36 lakh. With a market-cap of Rs9 crore as on 28 May 2015, over the past nine years, the stock price movement of DSI has been amazing. It rallied smoothly and unimpeded from around Rs100 in March 2006 to a peak of Rs11,700 in June 2011, a rise of 11,600%. The smooth rally was a result of the stock being locked in its upper circuit of 2%, on each day that it was traded, day after day! Even the global financial crisis did not create any volatility in the stock. After hitting this peak, it started trending downward. This time, again, the downtrend was predictable, constantly hitting the lower circuit. From June 2011 to 26 May 2015, the stock declined by as much as 97%, from Rs11,700 to Rs306. On an average, there were just four or five trades each time the stock was traded since March 2006. In June 2013, DSI was debarred from trading in securities by SEBI for not complying with the minimum public shareholding requirement.

An Open Memo To Noble Group’s 15,000 Employees by Michael Dee; First, fire your PR firms and those lawyers suing Iceberg Research as Iceberg is not your problem. Your problems and those of Noble are of management’s own making by not answering question completely and convincingly to the market, accepting blame where due, and instead engaging in diversionary tactics which have not and will not work

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http://www.sharesinv.com/articles/2015/05/29/open-leter-noble/?utm_source=email

An Open Memo To Noble Group’s 15,000 Employees

CORPORATE DIGEST | 29 MAY 2015

This post is republished from a letter/memo written by Michael Dee addressed to Noble Group’s employees. Michael has been in the investment banking scene (ex Morgan Stanley CEO SE Asia, ex Senior MD of Temasek Holdings) for more than 30 years.

As a banker for 35 years I have watched a steady deterioration in the corporate governance ecosystem since 2000. There is never just one problem in a crisis because the machinery of governance is so complex.

It is the interaction of many gears and springs like a Swiss watch and the modern financial system suffers from what I call Complexity Collapse.

The ecosystems complexity collapses when systematically weakened by each gear looking out for itself rather than the health of the entire organism.

Noble is great example of this and I am watching each element look out for itself and thus the protections for employees and minority investors are been abandoned. Continue reading →