Treasury seeks action on Viceroy conduct

CAPITEC Bank received a massive boost from the government yesterday‚ with the national Treasury saying it had raised the issue of a Viceroy report released this week with the relevant authorities – and was satisfied it did not have to put the bank under curatorship.

The Treasury said it had been in constant contact with the registrar of banks since the report was released.

It was also satisfied with the assurance from the South African Reserve Bank that Capitec was well capitalised‚ liquid and solvent‚ and met all prudential requirements.

“This means that the funds of depositors are safe‚” the Treasury said.

But it wants something done about the conduct of Viceroy.

“The national Treasury has requested that the Financial Services Board [FSB]‚ as the market regulator‚ working with the JSE‚ urgently consider whether it should initiate a marketabuse investigation into the conduct of Viceroy‚ and to ensure that it is regulated appropriately.

“The FSB is requested to also alert relevant overseas regulators‚ like the Securities and Exchanges Commission in the US and the Financial Conduct Authority in the UK‚ to consider whether Viceroy is regulated appropriately‚ and to consider whether it has transgressed any of their market conduct and market abuse laws that aim to protect investors‚” the Treasury said.

In the controversial report‚ Viceroy stated that it had legal documents showing that Capitec advised and approved loans to delinquent customers to repay their existing loans.

These documents also showed Capitec engaging in reckless lending practices as defined by South Africa’s National Credit Act‚ the report said.

Capitec said the report was filled with “factual errors‚ material omissions and opinions that are not supported by accurate information”.

The Reserve Bank noted the report but said Capitec Bank was solvent‚ well capitalised and had adequate liquidity.

The Treasury noted the reckless manner in which Viceroy had released the report.

It echoed the sentiments of many market analysts, who said Viceroy was short-selling in Capitec shares ahead of the release of its report “and stood to benefit substantially from forcing the Capitec share price to fall”. – TimesLIVE