Business Leadership South Africa (BLSA) says the economy is harmed when negative aspersions are cast about companies.

On Thursday, BLSA published a new, ground-breaking report on the growing phenomenon of short-selling activity in South Africa.

The research revealed among other things that Viceroy’s research report on Steinhoff was substantially plagiarised.

The study, conducted by reputable research house Intellidex and titled Investment Research in the Era of Fake News, focuses on Viceroy, the short seller, which has published negative reports on prominent South African companies including Steinhoff and Capitec.

The report, based on research over the last few months, has made damning findings on Viceroy’s reports.

BLSA, which represents CEOs of the largest companies in South Africa, commissioned Intellidex’s research on short selling as part of its commitment to promoting inclusive growth and transformation and job creation and positioning business as a national asset.

BLSA CEO, Bonang Mohale says there was shock and confusion about Viceroy’s Capitec report among both regulators and investors when it first came out.

“There was a swirl of rumour about other companies Viceroy may target. Activist short selling is a new phenomenon in South Africa and we felt it was important to commission research that would draw out the facts and equip the public to separate good from bad practices. We commissioned the research primarily because our role as BLSA is to ensure our members and business in general build, protect and grow their investments to create shared prosperity and jobs in our economy.”

Mohale says BLSA members have signed an Integrity Pledge which commits them to root out corruption and anti-competitive behavior.

“Accordingly, it is also important that as part of enhancing our understanding of the functioning of our capital markets, we ensure that they do so with utmost integrity.”

He says, “Short selling can play a positive role in exposing corporate wrong-doing and improving the efficiency of markets. BLSA believes the economy benefits from robust criticism of corporate activity from the media as well as investors, whether they are long or short. However, it is important that this criticism be based on a reasonable assessment of the facts. It would harm the economy if negative aspersions are cast about companies, not because they represent genuine beliefs based on research, but because they are intended to damage the value of companies for profit. Such market manipulation is itself a form of corruption.”

Mohale calls on authorities to strengthen market regulation to ensure that all players in our capital markets operate with the highest standards of corporate ethics.

“We hope the Intellidex report contributes to the debate about corporate ethics and the need for regulation to catch up with sophisticated and subtler but equally damaging forms of market manipulation especially in an advanced economy like ours. Specifically we should consider enhancing transparency by introducing regulations requiring disclosure of all short positions. This already happens in Australia, the UK and the US. By tracking short positions, authorities are able to determine when some or other social media campaign is connected to traders’ positions. This will also ensure the public has a better context in order to be able to interpret information that is spread about companies.”

Viceroy’s response below:



Vicery (Text)

Read full report below:



Intellidex Report Short Selling in the Era of Fake News (Text)