Fraser Perring, founder of Viceroy Research.
  • The research group Intellidex published a report, commissioned by Business Leadership SA, on the controversial firm Viceroy on Thursday morning.
  • It found that Viceroy “substantially plagiarised” a key report on Steinhoff, among other serious accusations.
  • For its part, Viceroy highlighted spelling mistakes in the Intellidex report.

The research group Intellidex on Thursday released a withering report on Viceroy Research.

Viceroy, a small firm headed by a former British social worker, rose to prominence after it released a report about accounting irregularities on Steinhoff. The report contributed to a massive slump in the company’s share price last year. 

Its report on Capitec earlier this year caused the banking group to lose almost a quarter of its value. 

Some of the key Intellidex findings are:

  • Viceroy’s Steinhoff report was “substantially plagiarised” from a report produced by hedge fund Portsea Asset Management six months earlier, according to Intellidex. “Viceroy’s contribution of original content to the report appears to be negligible. While the Steinhoff report and related media coverage gave Viceroy considerable influence, in our view this was misplaced given that, according to our research, the Steinhoff report was substantially not its own work. On the contrary, Viceroy’s influence benefited from little more than timing, with its report published just two days after the Steinhoff saga hit the news, when the market was extremely eager for any insight on what had gone wrong at Steinhoff.”
  • Intellidex says Viceroy’s "patchy" quality of research has deteriorated after the Steinhoff report, particularly in the case of Capitec and Advanced Micro Devices (AMD). "Nevertheless, these reports had a significant impact on share prices, particularly Capitec and ProSieben. Our view is that this impact resulted from the influence Viceroy had gained from the widely circulated and cited Steinhoff report, rather than from the content of those reports."
  • The purpose of the release of its research reports seems to be to manipulate market prices instead of "the self-expression of genuinely held beliefs", says Intellidex. "However, we think it would be difficult to conclude that this amounts to illegal market manipulation as such a finding would turn on intent."
  • Viceroy has no formal registration with any financial regulator, according to Intellidex. 
  • Intellidex could not determine how Viceroy earns its money. "However, given the ecosystem Viceroy occupies, and the value it has generated for other members of that ecosystem, we speculate that Viceroy benefits from semi-formal gratuities from other funds and short sellers, a practice that is seen between other members of the ecosystem." Intellidex found that Viceroy covers companies that are subject to significant short selling before and after its research is released. 
  • Intellidex found that the three members of Viceroy have limited financial markets experience of no more than a few years each. Its founder Fraser Perring was disbarred as a social worker in the UK four years ago after a hearing found him guilty of misconduct and  dishonesty.

The full Intellidex report on Viceroy can be downloaded here.

Intellidex, which was founded in 2008, said its Viceroy report was commissioned by Business Leadership SA. Most of SA's most prominent companies - including Capitec, the JSE, Nedbank, Investec and Old Mutual - are members of the business organisation.

Viceroy reacted in a tweet on Thursday morning:


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