JOHANNESBURG - The Viceroy research group has called on the Finance Minister and the South African Reserve Bank to immediately place Capitec under curatorship after branding the bank as a "loan shark with massively understated defaults - masquerading as a community finance provider".
The US-based research organisation also produced the report that blew the lid on the accounting fraud at Steinhoff last year.
In its latest report released on Tuesday morning, Viceroy says it has found that Capitec has been advising and approving loans to delinquent customers in order to repay existing loans.
The research group further states that there's no operational difference between Capitec and the likes of African Bank, which went under due to reckless lending.
Viceroy says that it compiled its report based on information from former Capitec employees, customers and people familiar with the business.
Capitec: A wolf in sheep’s clothing. Viceroy’s latest report is now live. $CPI #JSE @SAReserveBank @CapitecBankSA— Viceroy (@viceroyresearch) January 30, 2018
Fraser Perring of Viceroy Research will appear on Bloomberg @business at 8:30am GMT to discuss the report.https://t.co/5A0n53OEbb pic.twitter.com/v8qnXvuMnP
We have taken note of the Viceroy report on Capitec Bank. We are currently in the process of investigating the report in detail and will respond appropriately.— Capitec Bank (@CapitecBankSA) January 30, 2018
Shares in Capitec Holdings fell more than 10% in mid-morning trade after the group said the South African lender overstates its financial assets and income.
By 1021 GMT, Capitec stock had dropped 10.04% to 836.08.
Capitec’s Chief Financial Officer Andre du Plessis dismissed the report, saying the allegations were "totally unfounded".
"It’s very surprising that someone writes a report who knows nothing about us. There’s a total lack of understanding of what we do,” Du Plessis told Bloomberg TV.
Read the Viceroy report 'Capitec: A wolf in sheep’s clothing'
Additional reporting by Reuters.
This article first appeared on EWN : Viceroy labels Capitec a loan shark, wants bank placed under curatorship