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The War Between Viceroy Research & Capitec Intensifies

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The War Between Viceroy Research & Capitec Intensified This Morning With Viceroy’s Open Letter With A List Of Questions It Wants Answered…

BE careful what you wish for, the saying goes. In the ensuing war between Viceroy Research and Capitec, the latter had spoken about it’s willingness to be transparent.

The research company has intensified it’s battle in an open letter to Capitec with specific questions the bank must answer. It’s the kind of stuff that calls for popcorn, as we wait and watch what the next move will be.

“20 February 2018

The Board of Directors

Capitec Bank

PO Box 12451 Die Boord

Stellenbosch 7613 South Africa

investorrelations@capitecbank.co.za

Dear Board of Directors Viceroy open letter to Capitec Thank you for your open invitation to address our questions. We believe our reports have clearly conveyed our concerns with Capitec, but have happily condensed our research into questions if that is your preference. 1. In the 12 months to August 2017, what was the actual value of loans that were cured out of arrears? Capitec provides an estimate of cured arrears for the year ending August 2017 in its response to concerns raised by Benguela Global Fund Managers dated 1 February 2018.

Screen Shot 2018-02-20 at 4.11.08 PM

Read the full letter here letter-to-capitec-20-02-18

It all started with the research company accusing the bank of being a loan shark that had overstated its financial assets and income. With every fall of the bank’s shares, ordinary citizens wondered why their uncle’s favourite brandy had made news.

Not another Steinhoff!

“Capitec: A wolf in sheep’s clothing

PDF Download Link

Based on our research and due diligence, we believe that Capitec is a loan shark with massively understated defaults masquerading as a community microfinance provider. We believe that the South African Reserve Bank & Minister of Finance should immediately place Capitec into curatorship.

Capitec Bank Holdings Limited (JSE: CPI) is a South Africa-focused microfinance provider to a majority low-income demographic, yet they out-earn all major commercial banks globally including competing high-risk lenders. We don’t buy this story. Viceroy believes this is indicative of predatory finance which we have corroborated with substantial on-the-ground discussions with Capitec ex employees, former customers, and individuals familiar with the business.

Viceroy’s extensive due diligence and compiled evidence suggests that indicates Capitec must take significant impairments to its loanswhich will likely result in a net-liability position. We believe Capitec’s concealed problems largely resemble those seen at African Bank Investments (JSE: AXL) prior to its collapse in 2014….”

The link above has the full article. 

But the South African Reserve Bank (SARB) jumped in quickly, defending Capitec Holdings, which it said was “solvent, well capitalised and has adequate liquidity”.

That didnt stop the research company from hitting back. It said the Reserve Bank had mistakenly decided to stake its reputation on the accuracy of Capitec’s accounts.

“The South African Reserve Bank has a responsibility to determine whether the information provided to them – and on which they base their regulatory decisions is accurate. We do not think it is,” it said.

“The SARB has, at this point, a responsibility to perform a full regulatory inspection of Capitec. Viceroy remains firm in its belief that this will result in SARB placing Capitec into curatorship.” https://viceroyresearch.org/2018/02/05/viceroy-comments-on-sarb-statement/

Capitec CEO Gerrie Fourie strongly defended the bank: “Our banking regulators have a solid track record – in fact, our banking industry is seen as one of the best in the world – Capitec therefore operates in a very stable environment with a track record of 17 years of transparency.”

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2 Comments

  1. It might be true that Capitec Bank provides credit to customers who do not qualify but it is what all credit providing institutions do in RSA. Let that company scrutinize other companies, you will see that this practice is widespread in RSA. My wife does not work but two famous retailers gave her credit. One of the so called big bank offers products which do not really give value to its customers but to throw them deep in debt.

    Viceroy must also scrutinize the so called big banks. You will see that some of their products do not take customers from debt but the real aim of the product is to keep the customer in debt.

    Capitec is the target of this company because Capitec really provides value for money products. Capitec’s interest rate is low as compared to other banks. Capitec’s monthly charges are low as compared to other banks. This research on Capitec is a façade by the so called big banks. They want Capitec business to crash so that all Capitec customers go to them. what other banks are doing is a total rip off of customers in terms of monthly charges and interest rate charges. This company must look into that if it really is a company which wants to protect interest of the people.

    1. Are we back to that reckless lending by banks? This conspiracy of the big banks has been mentioned in many circles and I wonder if money is that much more important than the friendship of the Stellenbosch mafia who control the banking world and everything else.

      Firstly, let’s remember that Viceroy is the same company that exposed the corruption at Steinhoff. The links between Steinhoff, Capitec and PSG are cause for scrutiny.

      Capitec is after all, Jannie Mouton’s company. Mouton is Chairman of PSG. Steinhoff has shares in PSG. Notorious Markus Jooste of Steinhoff sat on the boards of PSG & Capitec. According to Viceroy PSG they said is Capitec’s largest shareholder and Steinhoff was, until recently, PSG’s largest shareholder.

      Look at the incestuous relationship.

      – Markus Jooste, Steinhoff’s former CEO, served on the boards of both PSG and Capitec.
      Steinhoff’s former chair Christo Wiese who also served on the board of PSG.
      Jannie Mouton, PSG’s founder and chairperson who also served on the board of Steinhoff. His son Piet Mouton, who is now the CEO of PSG, also served on the board of Capitec.
      Ben la Grange, the former Steinhoff CFO, served on the board of PSG. He resigned from Steinhoff African Retail on January 25, 2018.

      So is this just a conspiracy…..

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