Noble Group defends off-balance sheet inventory deals

Firm’s treatment of optional commodity inventory sales is appropriate, CEO says

accounting
Noble's accounting treatment of deals was justified, says CEO

Noble Group, the Hong Kong-based commodity trader whose accounting practices have come under attack in recent months, has struck back at critics who accuse the firm of disguising its true debt levels by selling inventories to banks and buying them back soon afterwards to raise cash.

The arrangement – which Noble refers to as an optional inventory sale – is widely used by commodity traders and can help firms reduce the amount of working capital they have tied up in connection with keeping crude o