South African financial service provider, Capitec Bank has been labelled a ‘loan shark’ by the Viceroy research group.
The Viceroy research group, which is a team dedicated to identifying long short opportunities in global public markets, released a report this morning saying it found that Capitec has been advising and approving loans to delinquent customers in order to repay existing loans.
The research group has since 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.
Capitec Holdings have since fallen by 10% in mid-morning trade after Viceroy release the report claiming the South African lender overstates its financial assets and income.
According to media reports, 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,” he continued.
Capitec took to social media saying “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.”
The South African Reserve Bank has sisnce commented on the situation saying according all the information available, Capitec is solvent, well capitalised and has adequate liquidity, adding that the bank meets all prudential requirements.