Noble founder resigns as non-executive director with immediate effect

Noble Group founder, non-executive director and chairman emeritus Richard Elman, 77, resigned yesterday with immediate effect.

The resignation comes as Noble is facing pressure from its creditors and shareholders.

In a separate announcement yesterday, the commodities trading company said it intends to "vigorously resist" a lawsuit by major shareholder Goldilocks Investment accusing it of inflating profits to raise money.

Noble said it had not been served with the writ and was unable to comment on the accuracy of news reports, but "the company believes the allegations in the lawsuit... to be unfounded and intends to vigorously resist them if served".

Mr Elman had retained a presence in the company he founded in 1986, even as he gradually gave up leadership roles over the years. He stepped down as chief executive at end-2009 and became non-executive chairman, though he struggled to hand over the reins - the group has had five chief executives in seven years.

He stepped down as chairman when restructuring specialist Paul Broughwas appointed to the position last year. The post of chairman emeritus was then created for Mr Elman.

Goldilocks Investment welcomed the resignation, calling it a "new dawn" for the firm, even as it raised questions on whether Mr Elman is entitled to any further payments.

"Despite lack of reasons, Mr Elman's resignation should be welcomed," it said in an e-mail statement. "It presents an opportunity for a new board composition which would greater protect stakeholder interest and transparency."

A board consisting of a majority of independent directors may be the stepping stone towards a fairer restructuring scheme, it said.

According to a Bloomberg report, which cited documents filed in Singapore's High Court, Goldilocks is accusing Noble and its executives, including Mr Elman, of relying "on the inflated profits and balance sheet to raise capital through bond and right issues on the SGX (Singapore Exchange) and borrowing from financial institutions".- THE STRAITS TIMES