JOHANNESBURG - The tit for tat between Viceroy Research and Capitec lasted for the better part of the day with Viceroy threatening to provide more detailed information on the allegations it has leveled against Capitec.
Viceroy responded to Capitecs rebuttal of the allegations against it by saying, “Viceroy is preparing a response to Capitec’s recent statement. A starting point will be how management claim we under-represent repayment in our estimates, yet do not clarify if they have extended new loan to repay old debt,” charges Viceroy.
The firm was responding to a Capitec statement that said its report is filled with factual errors and material omissions in respect of legal proceedings and opinions that are not informed by accurate information.
It was a rollercoaster day for Capitec stock which opened today at R943, fell to R718 (-25%) and goes into the close at R923 (-3%).
The Bank’s stock began to recover after the central bank vouched for the company. Viceroy had called for the Reserve Bank to place Capitec under curatorship as it deemed the bank a mere “loan shark.’
Viceroy also took aim at Jean Pierre Verster, who is the chairman of the audit committee. Verster was appointed to Capitec and Capitec Bank’s boards on 23 March 2015.
Viceroy said it believes Verster is indirectly shorting Capitec through Steinhoff.
“We encourage Verster to raise the concerns within this report to company auditors and recognize Capitec’s resemblance to his previous African Bank short.”
However, Verster said allegations against him and Capitec was mischievous.
“The main allegation is that I indirectly shorted Capitec by shorting Steinhoff. Steinhoff's effective shareholding in Capitec was R7.5bn, less than 2% of their total assets, plus shorting Steinhoff does not cause a shorting of Capitec’s shares, so a bit mischievous,” Verster said.
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Verster employers, Fairtree Capital, where he serves as equity portfolio manager also backed their man. “By virtue of his position as non-executive director of Capitec Bank, Jean Pierre has always been precluded from all investment research, investment decisions and any other related activities in respect of Capitec across Fairtree Capital,” the company said.
- BUSINESS REPORT