The debacle of Steinhoff, as it is being referred to in the news media, gives rise to a concern about Viceroy — a research house that appears to have played a central role in the collapse of the Steinhoff share price and, perhaps, the inquiries into Steinhoff by regulatory bodies in various jurisdictions.

Viceroy appears to have benefited from selling the stock short prior to release of its report(s). How much money the firm has made is unknown. I think that the public ought to know how it has benefitted.

Has it in any way transgressed any laws or regulations? This ought to be investigated.

If Steinhoff is found to have provided financial information in accordance with international standards, the "warning bells" Viceroy has sounded will have come to naught, but the reality of financial and reputational mayhem will certainly have been significant and have caused real financial loss to many investors.

Many asset managers have taken the decision to sell the stock at prices perhaps 10% of what they were prior to this debacle.

Reputational damage can be devastating. Witness KPMG which has already suffered the loss of many clients amounting to in excess of R100m a year in revenues. And yet the investigations have not been concluded.

David Bergman
Via e-mail

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