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Treasury labels Viceroy report into Capitec ‘reckless’

Treasury says until recently, Viceroy had been trading in Capitec shares and stood to benefit from the subsequent fall in share price.

Capitec Bank. Picture: Capitecbank.co.za.

JOHANNESBURG - Treasury says the way Viceroy released its report on Capitec Bank is reckless.

On Tuesday, the Viceroy research group 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 Reserve Bank was quick to respond, saying the bank is financially sound but this has now been backed up the Treasury, which says Viceroy’s actions are clear proof that it’s not acting in the interests of financial stability in South Africa.

Treasury says until recently, Viceroy had been trading in Capitec shares and stood to benefit from the subsequent fall in share price.

It adds that it's satisfied with assurances from the Reserve Bank that Capitec is well capitalised and meets all prudential requirements.

Treasury says it has requested the Financial Services Board (FSB), working with the JSE, to urgently consider whether it should initiate a market abuse probe into the conduct of Viceroy.

The FSB is also requested to alert relevant overseas regulators to consider whether Viceroy is correctly regulated and whether it has transgressed any of their market conduct and abuse laws that aim to protect the investor.

Treasury spokesperson Mayihlome Tshwete says an investigation should bring clarity.

“We expect the investigation to give us clarity of whether they [Viceroy] are doing this for their own benefit.”

Tshwete says Treasury will also take feedback from the South African Reserve Bank.

“The taken the explanation and information from the Reserve Bank which says that the financial position of Capitec is on good footing.”

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