{ "docId": "019dd923-622c-750b-8b96-5115bded0db8", "docSlug": "562f89e5e11c", "documentTitle": "Noble Group (NOBL)", "authorId": "51_Muddy_Waters", "authorName": "Carson C. Block", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2015-04-09 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 8, "pageCount": 14, "prevPage": 7, "nextPage": 9, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 6, "notes": "The text functions as a forensic investigation of corporate transactions, highlighting potential fraud or shell company activity.", "elementsJson": [ "paragraph", "footnote" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b96-5115bded0db8/8", "deckHref": "/decks/019dd923-622c-750b-8b96-5115bded0db8", "deckJsonHref": "/decks/019dd923-622c-750b-8b96-5115bded0db8.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-5115bded0db8#slide-8", "components": [ { "bbox": null, "kind": "callout", "text": "These purported consideration amounts seem to be little more than accounting entries to a) justify these transactions, and b) produce more substance-less accounting profit.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0930-77dc-94a1-861a526683cf", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.72, "x": 0.14, "y": 0.51 }, "kind": "paragraph", "text": "When Noble bought PT ALH, it did so by acquiring PT BSM. PT BSM owned PT ALH. When Noble transferred PT ALH to Ms. Rahayoe / Tumondo's company, PT Dayana, it transferred PT ALH directly – i.e., without also transferring PT BSM. Thus, PT BSM was left to smolder on Noble's balance sheet a little while longer.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "18e15853-b0f4-4241-8055-db13e4a0b21f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.72, "x": 0.14, "y": 0.7 }, "kind": "paragraph", "text": "On January 24, 2014, the Indonesian government approved the AOA amendment transferring 100% of PT BSM to a company called PT Andhika Raya Semesta (\"PT ARS\"). (The AOA amendment had been notarized in December 2013.) PT ARS was formed on May 27, 2011. This is the exact same date that PT Dayana was formed (PT Dayana is the straw party that \"bought\" PT ALH from Noble and \"sold\" it to PT Atlas).", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2ab9eac9-baff-4b17-bb10-7ab0c2c52ba5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.07, "w": 0.72, "x": 0.14, "y": 0.37 }, "kind": "paragraph", "text": "We highly doubt that Ms. Rahayoe, her firm, or Ms. Tumondo ever paid Noble $4.0 million, and we completely dismiss the possibility that any of them additionally paid PT Atlas $8.0 million. These purported consideration amounts seem to be little more than accounting entries to a) justify these transactions, and b) produce more substance-less accounting profit.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9c79b182-e2ee-42b1-be52-033a9c3d347e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.72, "x": 0.14, "y": 0.14 }, "kind": "paragraph", "text": "Moreover, Ms. Rahayoe was one of two directors of PT BSM from 2008 until Noble bought it and PT ALH. (PT ALH had been a subsidiary of PT BSM since 2008.) Given the pervasive role Ms. Rahayoe and her firm played in these various transactions, the initial PT ALH purchase is suspicious. It is definitely difficult to regard it as arms-length.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ab4d411e-3bf6-40cf-9aa8-b79a7c99712a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.09, "w": 0.72, "x": 0.14, "y": 0.59 }, "kind": "paragraph", "text": "Noble announced that PT BSM issued 15,125,779 new shares, which constituted 55% of equity, to PT Jatro Indonesia on January 20, 2014. Noble claims that PT Jatro paid $28 million for this stake. There are some problems with this disclosure. First, the amendment to PT BSM's articles of association effecting the issuance to PT Jatro was not even notarized until April 3, 2014. However, something different happened in January though – it's a bit of a head scratcher.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ebc3e61d-d051-4de3-a53d-ef68360ed8a7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.72, "x": 0.14, "y": 0.24 }, "kind": "paragraph", "text": "Regardless, if we are to take both Noble and PT Atlas's disclosures at face value, then Ms. Tumondo and / or Ms. Rahayoe in September 2012 paid Noble consideration for PT ALH of $4.0 million. Then, Ms. Tumondo and / or Ms. Rahayoe received $4.0 million in 2013, but had to return that money along with an additional $8.0 million the same year. That would mean that the attorneys Ms. Tumondo and / or Ms. Rahayoe lost $12.0 million transacting with Noble and PT Atlas.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f9de6e77-d5b8-40de-a68b-f4003a41ae1d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.72, "x": 0.14, "y": 0.09 }, "kind": "paragraph", "text": "periods in which Noble owned the companies. This fact implies a business relationship between Noble and Ms. Rahayoe's law firm.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "fc221f56-a5de-4392-924f-1512f756c8b6", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.07, "w": 0.72, "x": 0.14, "y": 0.84 }, "kind": "source-note", "text": "28 Indonesian law requires at least two shareholders, so it is therefore common to have a nominee shareholder who owns one share.\n29 Noble January 20th 2014 “Notification on Subsidiary” SGX announcement.\n30 As evidenced by notarization of the corporate records. Its formation was approved on August 10, 2011.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "b689c277-6de4-4411-924d-a8c46e080dfc", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.35, "x": 0.14, "y": 0.47 }, "kind": "title", "text": "Tying Up Loose Ends – Disposing of PT BSM", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "179379df-2792-4117-8c88-1c5eeee11a5f", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 10, "from": 6, "beatId": "0ae25f44-6e73-4c25-ba85-72ade228048e", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Struggle", "beatSlug": "overcoming-monster-the-struggle", "evidence": "The document presents an analysis of Noble Group's transactions and accounting practices, highlighting contradictions and discrepancies.", "position": 1, "confidence": 0.8, "parentBeatName": "Development", "parentBeatSlug": "development" } ], "loops": [ { "to": 9, "from": 3, "name": "The Reveal", "slug": "05-the-reveal", "bestFor": "Product launches, strategic pivots, unexpected findings", "matchId": "661626c9-23dd-44b7-9cae-b354b6185fc5", "evidence": "The document presents a series of contradictions and discrepancies in Noble Group's accounting practices.", "position": 0, "objective": "To reveal the truth about Noble Group's accounting practices", "structure": "Setup the Question -> Build Suspense -> The Big Reveal", "confidence": 0.7, "description": "Build mystery and anticipation, then deliver a surprising or powerful conclusion" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }