That is the statement from Viceroy Research‚ the company that first flagged irregularities at Steinhoff.
Reacting to a 33-page report by the research firm, the SARB was quick to allay any fears and diffuse any panic after Viceroy called for the central bank to be place Capitec under curatorship.
Tha bank said it is reviewing Viceroy's report and will respond in more detail later on Tuesday.
Capitec, meanwhile, came out to vehemently deny the allegations contained in the report, calling them "baseless".
"We don't buy this story".
Viceroy stated that "discussions" with - among others - former Capitec employees, former customers and "individuals familiar with the business" suggest that Capitec "must take significant impairments to its loans which will likely result in a net-liability position". We believe Capitec's concealed problems largely resemble those seen at African Bank Investments prior to its collapse in 2014.
"We think that it's only a matter of time before Capitec's financials and business unravel‚ with macro headwinds creating an exponential risk of default and bankruptcy". These documents also show Capitec engaging in reckless lending practices as defined by South Africa's National Credit Act.
Capitec had refinanced delinquent loans‚ suggesting its loan book was massively overstated.
Shares in Capitec Bank tumbled as much as 20 percent on Tuesday after USA researcher Viceroy said it had done extensive due diligence and compiled evidence suggesting the company must take significant impairments to its loans, which would likely result in a net-liability position. A write-off of R11bn - about 13.5% of Capitec's total assets at the end of August - would more accurately represent the delinquencies and risk in Capitec's portfolio, Viceroy said.
The Sarb noted the 33-page report issued on Tuesday by the trio of short sellers and researchers of US-based Viceroy.