File picture: James White

PRETORIA – Listed property company NEPI Rockcastle yesterday hit back at Viceroy Research, urging the Financial Sector Conduct Authority to initiate a market abuse investigation against the organisation as a matter of urgency.

NEPI said that the authority should also alert relevant overseas regulators to consider whether Viceroy was regulated appropriately and operating in line with market conduct and laws.

The request follows the release of a damning report by Viceroy on Wednesday, which plunged NEPI shares into a tailspin, wiping more R9 billion off its market cap.

Yesterday NEPI recovered from the 14.07 percent slump that it had undergone on the release of the Viceroy report to close 11.72 percent higher at R110.76.

NEPI said it wanted Viceroy and its associates to declare any trading positions they may have on the company on the day the report was issued in order to facilitate a proper investigation.

NEPI said it was echoing the request made by the National Treasury to the authority following the release of a report into Capitec Bank by Viceroy.

Viceroy exposed the 2016 Steinhoff debacle.

Its report on NEPI claimed to have uncovered numerous inconsistencies with the company’s financial reporting and major links to established financial fraud.

Viceroy said local filings for NEPI’s Romanian subsidiaries were overstated for at least the past three years.

The research organisation Viceroy was highly critical of NEPI’s December 2016 acquisition of Rockcastle for €2.3bn, because the goodwill on the transaction amounted to a massive €886 million, a 62 percent premium to book value for a real estate investment trust, with this premium written off in its entirety within six months of the acquisition.

Viceroy claimed many insiders benefited from this excessively priced transaction, including Resilient Properties, Fortress and the chief executive and chief financial officer of Rockcastle and believed investors had been “hoodwinked” over this transaction.

BUSINESS REPORT