By Adam Clark

Viceroy Research, the activist investor which targeted collapsed German payments company Wirecard, said Wednesday that it would fight a fine imposed on it by a South African regulator over allegedly misleading statements about Capitec Bank Holdings Ltd.

South Africa's Financial Sector Conduct Authority imposed a 50 million-rand ($3.5 million) fine on Viceroy and its individual partners, Aiden Lau, Fraser John Perring and Gabriel Bernarde over a short-selling report it published on Capitec.

"During January 2018 they published false, misleading or deceptive statements, promises or forecasts regarding material facts about Capitec, which they ought reasonably to have known were not true," the FSCA said.

The regulator said the comments had caused shares in Capitec, one of the largest retail banks in South Africa, to fall by 23% and that they failed to publish corrections to false statements. It also said it enlisted the U.S. Securities and Exchange Commission to compel a Viceroy representative to be questioned.

The FSCA said Viceroy had made a series of misleading statements in its 2018 reports which called Capitec a "loan shark with massively understated defaults". The regulator said Viceroy had incorrectly calculated Capitec's writeoffs, falsely claimed it had reviewed the data of thousands of borrowers, and wrongly interpreted the merits of lawsuits against the bank.

Viceroy said it would appeal the findings, that the FSCA had ignored its detailed response to the investigation, and that the SEC hadn't recommended any enforcement and closed its own case.

"We believe the purpose of the investigation...is purely to make an utilitarian example of critics who dare publish insightful contrarian analysis into South African companies. We say utilitarian, because the FSCA's grievances in our reports have been duplicated and published by dozens of other journalists and financial analysts alike. We will not be the scapegoat," Viceroy said.

"The level of prejudice the FSCA has used to protect a South African institution is appalling," Viceroy added.

Viceroy rose to public prominence as one of the short sellers that targeted Wirecard in the face of opposition from German regulators, before the company filed for insolvency in 2020. It also notched a significant success in South Africa, when it released a critical report of retailer Steinhoff International Holdings NV before the company admitted a series of accounting irregularities in 2017 which sent its stock price plunging.

Write to Adam Clark at adam.clark@wsj.com

(END) Dow Jones Newswires

09-08-21 0931ET