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Singapore officials insist the city-state’s regulatory framework for financial disclosures is “multi-layered and robust”, despite criticism over enforcement action taken against disgraced commodity trader Noble Group.

The Monetary Authority of Singapore (MAS) announced on August 24 it had issued a S$12.6mn (US$9mn) fine to Noble, a one-time blue chip energy and metals trader that gradually collapsed after allegations of aggressive accounting and misleading financial statements.

As well as the fine – the largest penalty of its type in the city-state’s history – Singapore’s Accounting and Corporate Regulatory Authority (ACRA) issued orders against Noble’s auditors from Ernst and Young and gave “stern warnings” to two former group directors.

MAS soon faced questions over the extent of the actions taken, however.

Arnaud Vagner, a former Noble employee who published a damning report into the company’s operations in February 2015, says the fine represents just 0.15% of the market cap lost since then.

Noble’s share price crashed in the wake of the report’s publication, and the company posted losses of US$1.7bn in early 2016.

The penalty is also a fraction of the earnings made by company directors and auditors between 2008 and 2017, Vagner adds, and was handed to Noble Resources, an entity “entity whose post-restructuring shareholders and creditors were not involved in the fraud”.

Separately, in a parliamentary question, Singapore MP Louis Chua asked MAS whether it “intends to strengthen disclosure obligations and penalty regimes relating to false and misleading statements and breaches of disclosure requirements” in light of the Noble case.

In response, Indranee Rajah, a minister in the Prime Minister’s office and second minister for finance, said the fine was the maximum civil penalty allowed under the Securities and Futures Act.

Rajah says that penalties are capped at S$2mn for each breach, or three times the amount of profit gained or loss avoided as a result of filing misleading financial statements.

“In this case, the incorrect recognition of future fees from the marketing agreements presented an artificial picture of [Noble’s] financial position, but did not translate into actual monetary gains by the company,” she says.

Noble was found to have entered into long-term agreements with mining producers to bring commodities to market, then treated those agreements as financial instruments rather than service contracts, effectively recording gains on its balance sheet before any cash had been generated.

Rajah adds that additional action could not be taken under Singapore’s Companies Act because Noble was incorporated in Bermuda, while authorities were unable to obtain sufficient evidence to prove offences “were attributable to the neglect of any particular individual”.

She says MAS and ACRA “continually review and enhance” regulatory and penalty regimes, and that a review is already underway on the fines that can be imposed on directors, but does not say any fresh action will be taken.

Vagner tells GTR he believes Rajah’s response amounts to “intellectual dishonesty”.

He refutes that Noble made no monetary gains as a result of its accounting practices, arguing: “Noble raised billions against fraudulent misrepresentations. That is actual monetary gain.”

Vagner also says that the claim there was insufficient evidence related to Noble directors and managers is “an insult to the retail investors who lost their shirts”, adding: “We will issue our opinion of this deplorable response.”