Capitec Bank says the Financial Services Board will investigate the possibility of suspected insider trading, after its stocks took a drop before the controversial Viceroy Research report was released on Tuesday.
Speaking to HuffPost on Wednesday afternoon, Capitec CEO Gerrie Fourie said it was "concerning" that stocks began to dive before Viceroy's report was published.
"What is concerning is that when the report came out, our stocks dropped slightly before it was published. This shows that certain people may have known about it before. We cannot investigate this ourselves, so the FSB is now involved," Fourie said.
On Monday, Capitec closed nearly 8 percent weaker on the markets, implying that some predicted the effect the report would have and when it would be released.
Viceroy Research made headlines last year when it unearthed accounting irregularities at global furniture giant Steinhoff. In its latest report, Viceroy called on the SA Reserve Bank (SARB) and Finance Minister Malusi Gigaba to immediately place Capitec into curatorship.
Viceroy claimed that the reconciliation of loan-book values, maturity profiles and cash outflows imply Capitec is allegedly either fabricating new loans and collections, or refinancing about R2.5-billion in principal per year by issuing new loans to defaulting clients.
Capitec has denied the allegations, but suffered a temporary 20 percent drop in share price after the report was released.
"We have instructed our attorneys to approach the FSB to investigate Viceroy. We are going through their report, to understand their numbers and see what is accurate and what is not. We will then consider how to handle it further. We don't know if this report was deliberate or not, but by the end of the week, we should have a report on the matter," Fourie said.
"The report is very one-sided, and a lot of things are incorrect."