SINGAPORE: Singapore's central bank warned on Wednesday it would take action if a report alleging fraud at Asian commodity trading firm Noble Group was found to have breached its securities rules.
The report, by little known group Iceberg Research and posted online on Sunday, triggered a two-day rout in Noble's shares that wiped $770 million off the company's market value.
In a statement, the Monetary Authority of Singapore, which is also the securities market regulator, said it was reviewing the statements in the research report to ensure they did not breach the Securities and Futures act.
MAS gave no further details, but the act prohibits anyone from making false or misleading statements that are likely to affect trading in a particular stock.
Noble shares rose almost 4 percent in early trade after MAS said it was conducting the review.
Noble, which is listed in Singapore but based in Hong Kong, said in a separate statement it would fully cooperate with the MAS investigation. The company has denied the allegations of accounting fraud made in the Iceberg research.
The MAS review comes as regulators of other Asian markets, particularly Hong Kong, are clamping down on research reports that target specific companies with allegations of corporate governance failings.
Little is known about Iceberg Research, which declined to comment on its background, analysts or its methodology. It said, however, that it did not have a short position on the company.
Other shortsellers or funds also said they had not heard about Iceberg.
Soren Aandahl, head of research at high-profile shortseller Glaucus Research, said Iceberg may be based in Singapore or Hong Kong, which would explain its decision to remain anonymous.
The rout in Noble's shares has raised questions over the power small research groups have to inflict damage on listed firms.
Founded by British businessman Richard Elman in 1987, Noble is the second major Singapore-listed commodities trader to have its accounting practices challenged by a small research firm. Olam International was hit by a negative report from Muddy Waters in late 2012.
After the attack, Singapore state investor Temasek lifted its stake in Olam to around 57 percent from just under 25 percent.
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