Nepi Rockcastle, one of the companies caught up in the share-trading scandal that engulfed the Resilient group of companies earlier in 2018, had another R9bn wiped off its value on Wednesday after Viceroy Research accused it of overstating its profit.

The company immediately dismissed the Viceroy report as "fiction", while one analyst said it was not credible.

Shares in Nepi, a listed property company with extensive investments in central and eastern Europe, fell 14% to close at R99, pushing its decline in 2018 to more than 50%.

Viceroy, which burst onto the scene late in 2017 when it published a report on Steinhoff International in the wake of that company’s admission to massive accounting irregularities, said Nepi’s Romanian subsidiaries had recorded a pretax loss of about €41m in 2017, and not the €284.8m profit reported by the company, leading to a discrepancy of about €325m.

Romania accounts for about 57% of the group’s net rental and related income.

This "suggests company earnings figures are massively overstated for at least the last three years", says Viceroy, which itself has courted controversy after releasing a critical report that led to a selloff in Capitec shares.

That report has been widely discredited and the Stellenbosch-based bank’s shares have since recovered, and are up just more than 1 % in 2018.

The drop in Nepi Rockcastle’s share price is the latest blow to institutional and retail investors who suffered massive losses after critical reports from companies such as 36ONE Asset Management, Arqaam Capital and Mergence Investment Managers into share trading at the Resilient group of property companies.

Those allegations prompted a Financial Services Conduct Authority investigation that is still ongoing.

Viceroy’s report was a "shocking piece of fiction", Nepi Rockcastle CEO Alex Morar said. "This is not a research report, it just forms a misguided view. Our most junior accountant here says the writers of this report have a shockingly poor understanding of accounting rules and policies in Romania.

"They have ignored inter-company transactions and made no attempt to speak to us or to understand the company in any way," he said.

Morar said the company would respond in detail on Thursday. This would include an update about its response to the call by institutional investors
for a forensic investigation into the company.

Nesi Chetty, head of property at Momentum, says the Viceroy report lacks credibility. "There was no attempt to do a valuation. The was no proper reconciliation of the various assets that Nepi Rockcastle owns.

"The report is mostly geared and written to benefit from a short position that the writer has," he said.