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South Africa’s financial markets regulator, the FSCA, has fined notorious US short-seller Viceroy R50-million for a ‘false and misleading’ 2017 report accusing the country’s fourth-largest bank, Capitec, of being a loan shark and concealing defaults on its loan book.

The report triggered a sharp fall in Capitec’s shares and an angry response by the bank, accusing Viceroy of a smear campaign.

The Financial Sector Conduct Authority (FSCA) said on Wednesday that Viceroy and two other people who participated in compiling the reports had contravened the Financial Markets Act by publishing “false, misleading or deceptive statements, promises or forecasts regarding material facts about Capitec, which they ought reasonably to have known were not true”.

“The respondents made a concerted effort to publish these statements as widely as possible, knowing that Capitec is a systemically important financial institution in South Africa, and that these statements had the potential to trigger a run on the bank,” the FSCA said in a statement summarising its findings.

The FSCA said immediate damage had been done to Capitec’s share price, which fell close to 25%, and that Viceroy had benefited financially from the share decline.

Viceroy will challenge the finding and fine, saying the FSCA investigation…

Read the full story on Daily Maverick.