Viceroy Research reports have obviously lost some of the potency they had when the previously obscure outfit burst into the public consciousness in the wake of the disclosure of “accounting irregularities” at Steinhoff International.

That might explain why Nepi Rockcastle shares have managed to recover most of the losses suffered on Wednesday, when it became the latest South African target of the short-sellers.

Steinhoff will probably go down as one of the biggest acts of corporate fraud in SA’s history, having cost shareholders around R200bn due to the subsequent collapse in market value. That’s before you take into account the forced sale of perfectly good assets to keep creditors at bay and the parent company afloat.

 A misconception developed in 2017 that the famous, or infamous, Viceroy note in December was the catalyst that caused the Steinhoff share collapse, when it came after the scandal had already broken.

Viceroy’s reputation suffered after it accused Capitec, one of the success stories of SA banking in recent years, of a litany of misdeeds and argued that the Reserve Bank should immediately place it under curatorship. The shares plunged by as much as 21% on the day in January.

Could that have been an indication of how much confidence has been shed in the listed property sector after the share-trading scandal that lost investors in the Resillient group of property companies more than R100bn?

The note, titled “Capitec: A wolf in sheep’s clothing” was subsequently dismissed by SA regulators, who described it as a reckless act that could lead to a run on the bank.

That report has been discredited and Capitec is thriving again, having withstood the attack on its reputation. It could have turned out a lot worse, seeing this happened in an environment where investors were smarting from the misdeeds at Steinhoff, and trust was in short supply.

In its interim results released in September, Capitec reported that it had added more than 109,000 active customers per month in the six months to August 2018, evidence that it had managed to repel the attack on its reputation. The shares have since recovered and are in positive territory in 2018, compared to a 3% drop in the banking index.

Viceroy had never hidden the fact that it had conducted “research” on companies that it — or its principals — had short positions in, meaning they would gain from any subsequent declines in the shares. Suspicion grew that far from conducting research, their behaviour was more similar to market manipulation and insider trading.

One would have expected that, with this background, the initial impact of their report on Nepi would have been far more muted than the 14%  that wiped another R9bn off its market value.

Could that have been an indication of how much confidence has been shed in the listed property sector the share-trading scandal that lost investors in the Resilient group of property companies more than R100bn?

Wider losses across the listed property sector — the index is down 30% in 2018 — mean the victims go beyond those who held shares in the Resilient stable.

Investors are no nearer to finding out what happened, though the allegations surfaced early in the year. To say that the companies have treated the investing community with disdain would be an understatement. 

Not that it would be a good idea to be dismissive of the many ordinary workers and pensioners who directly suffered losses, not even the country’s largest investment managers seemed to have sway over the companies. 

Some of the biggest names in asset management, including the Public Investment Corporation, Allan Gray and Coronation, demanded a forensic investigation into the companies three months ago, something unprecedented in the local market. The response from the directors has been largely dismissive, preferring to conduct internal probes of their own companies.

Regulators haven’t covered themselves in glory either.

The Financial Services Conduct Authority started investigating back in March, and as yet no sign of any progress. Investors will rightly feel like they have been let down.

It’s interesting  that Viceroy, in the report, does also make reference to the companies’ stalling when it comes to the calls for a proper investigation, indicating that an apparent lack of accountability and enforcement here may have created an easy target for them to pounce on.