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• Teaching Note | HBS Case Collection | January 2018 (Revised March 2018)

  Fair Value Accounting Controversy at Noble Group (A) and (B)

  Siko Sikochi and Suraj Srinivasan

  Citation:

  Sikochi, Siko, and Suraj Srinivasan. "Fair Value Accounting Controversy at Noble Group (A) and (B)." Harvard Business School Teaching Note 118-063, January 2018. (Revised March 2018.)  View Details

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• Case | HBS Case Collection | February 2018

  Steinhoff International: Accounting Irregularities and Financial Markets

  Siko Sikochi and Austin Lim

  Steinhoff International Holdings N.V. was a holding company, whose subsidiaries manufactured, distributed and sold furniture and household products. Steinhoff was widely known as a South African company because it first listed on the South African Johannesburg Stock Exchange (JSE) and its global headquarters was in South Africa. However, Steinhoff went on to expand from distribution and manufacturing to retail businesses across 30 countries, employing over 130 thousand people. As its global revenues grew, especially in Europe, Steinhoff created a new holding company, Steinhoff International Holdings N.V. incorporated in the Netherlands and with a primary listing in Germany and secondary listing on the JSE. Steinhoff was soon mired in allegations and investigations of accounting misrepresentations, and came crashing on December 6, 2017 after admission of possible accounting irregularities. The case is set days after news broke out about the accounting irregularities and explores the decision of the Johannesburg Stock Exchange (JSE) on whether to suspend the listing of Steinhoff’s securities.

  Keywords: Accounting; Financial Reporting; Mergers and Acquisitions; Financial Markets; Corporate Governance; Retail Industry; Manufacturing Industry; Distribution Industry; Africa; South Africa;

  Citation:

  Sikochi, Siko, and Austin Lim. "Steinhoff International: Accounting Irregularities and Financial Markets." Harvard Business School Case 118-066, February 2018.  View Details

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• Case | HBS Case Collection | November 2017 (Revised January 2018)

  Fair Value Accounting Controversy at Noble Group (A)

  Siko Sikochi, Suraj Srinivasan and Quinn Pitcher

  Noble Group, founded in 1986, was a large commodities trader based in Hong Kong and listed on the Singapore Stock Exchange. In 2012, Noble shifted its business strategy towards an asset-light model. Under this model, Noble did not own mines or farms to produce commodities but built commodity sourcing capacity by working with and investing in producers in exchange for purchase and marketing contracts. Noble also worked with customers to secure supply contracts. Noble had a portfolio of 12,000 commodity contracts by end of 2014. The contracts were measured at fair value. Iceberg Research, an anonymous blog, released a series of reports starting in February 2015 alleging that Noble was too aggressive in its fair value accounting for contracts and investments in producers. Iceberg did not accuse Noble of fraud, but suggested that Noble’s profits and balance sheet were highly inflated and Noble was headed for disaster. Noble defended its accounting policies and hired PricewaterhouseCoopers (PwC) to provide an independent review of fair value measurement. PwC released a positive review of Noble’s accounting. However, questions remained whether Noble’s contracts and investments were overvalued. The case explores Noble’s business and investigates whether questions about its accounting practices were in the past following the attestation by PwC.

  Keywords: Fair Value Accounting; Policy; Goods and Commodities; Contracts; Valuation;

  Citation:

  Sikochi, Siko, Suraj Srinivasan, and Quinn Pitcher. "Fair Value Accounting Controversy at Noble Group (A)." Harvard Business School Case 118-034, November 2017. (Revised January 2018.)  View Details

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