(Nov 27): Singaporean regulators investigating Noble Group have focused their questions so far on the company’s use of mark-to-market accounting, according to people familiar with the matter.

The struggling commodity trader was thrown into fresh crisis last week after Singapore announced a three-agency probe into Noble’s accounts just days before a marathon US$3.5 billion ($4.8 billion) debt restructuring was due to complete. On Sunday, Noble said it would delay the deadline for that deal to Dec 11 to "fully address all concerns of the regulators."

The company said it was cooperating with the authorities, including "appointing experts to assist in responding to the technical accounting issues raised by ACRA" -- Singapore’s Accounting and Corporate Regulatory Authority. Those issues are centred on Noble’s mark-to-market accounting, the people said, asking not to be identified as they weren’t authorized to speak publicly about the investigation.

Noble’s use of mark-to-market accounting has been in focus since early 2015, when a previously unknown group called Iceberg Research started criticizing the company, saying it had inflated the value of long-term commodity contracts and carried billions of dollars in profits on its books that would eventually have to be written down.

Since then, the once US$12 billion company that saw itself as a challenger to the world’s largest commodity traders like Glencore Plc and Trafigura Group Ltd. has lost billions in value since 2015, reduced to a rump by untenable debt and writedowns.

Iceberg -- which has since revealed itself to be Arnaud Vagner, a former Noble employee -- said in its first report that the company’s long-term contracts were probably overvalued by about US$3.8 billion. Since then, Noble has written down, or taken reserves against, more than that.

Regulators investigating Noble include the Commercial Affairs Department of the Singapore Police Force and the Monetary Authority of Singapore, in addition to ACRA.

The three agencies said last week that Noble’s substantial writedowns announced in 2017 and 2018 had in part "provided the basis for authorities to commence overt investigations into potential breaches of our law." They’ve declined to give further details, citing the ongoing investigation.

Noble hired PricewaterhouseCoopers in 2015 to review its accounting methods in valuing long-term contracts, which were signed off by its long-time auditor Ernst & Young. At the time, PWC said Noble’s valuation methods complied with international accounting rules and the trader needed to improve its governance and methodology.

Noble maintains its position that its accounting was in line with international rules, according to the people.

The new restructuring deadline gives the company and its creditors two weeks to persuade the Singaporean authorities to allow the deal to go ahead. It’s still unclear what they will need to do to achieve that, the same people said.

The stakes are high: hedge funds have bought up much of Noble’s US$3.5 billion in debt over the past 18 months and could face substantial losses if the deal collapses.

The so-called "ad-hoc group" of creditors, which includes Taconic Capital Advisors, Varde Partners and Owl Creek Asset Management, has written to the Singaporean regulators stressing "the need to complete the restructuring as soon as possible," according to Noble’s statement on Sunday.