Read on Twitter
The supposed author behind the Viceroy short report on Grenke has a rather dubious background, see here via the excellent @RodBoydILM from last year: https://ffj-online.org/2019/11/04/fraser-perring-chronicles-of-deceit-part-one/
So…">https://ffj-online.org/2019/11/0... let’s take a look at some of the ‘inconsistencies’ in Viceroy’s report on Grenke. (1/n)
So…">https://ffj-online.org/2019/11/0... let’s take a look at some of the ‘inconsistencies’ in Viceroy’s report on Grenke. (1/n)
Number 1: The key point of Viceroy is that a ‘substantial portion of Grenke’s cash does not exist’. They do not back this claim up with any details, but alas true criticism was never their point in the first place, they just wanted to draw parallels to the Wirecard case. (2/n)
Throughout the report Viceroy remained intentionally vague on the cash claim, and of course this has now been debunked by the company itself. Of course there was never any merit to their claim, but nevertheless the company has now disclosed their cash balance. (3/n)
In true Trump-esque style, Viceroy then backtracks and relativizes its statement on 22 September 2020. (4/n)
Number 2: They spread intentional confusion (see picture) around the core leasing business, questioning how a printer can cost 7k EUR. The only thing unfathomable about these two statements is how little Viceroy seems to know about Grenke’s business. (5/n)
The amount of roughly ~7k EUR is per *contract* (containing multiple leasing objects) and not per printer. Of course, Viceroy is aware of this, but it just wouldn’t make for racy headline that way, would it? (6/n)
Number 3: Whilst the original ‘report’ at least took pains to construct a picture of undue behaviour, the updates released afterwards often contain plain lies, for example on 30 September 2020 they state the following: (7/n)
Mr Grenke of course only retired as CEO in 2018 - not 2014 - hence there is no timing coincidence here.
Number 4: Then Viceroy goes on to state that Sacoma AG and Garuna AG share the same address: (8/n)
Number 4: Then Viceroy goes on to state that Sacoma AG and Garuna AG share the same address: (8/n)
This is of course also only a constructed argument, since the address of Garuna AG was only changed in 2019 after the CPT sales process had been started: (9/n)
Number 5: Either Viceroy is unable to read the Swiss company register filings or they are unwilling to read them properly. In their original report they stated that Wolfgang Grenke took over Sacoma AG in January 2019, see their statement here: (10/n)
Of course that is wrong: Their very own excerpt (above) shows February 2020 as the correct date, January 2019 is the date a prior filing by Sacoma AG. Again Viceroy seems to intentionally twist the truth so that it fits their agenda. (11/n)
Number 6: On 21 September 2020 Viceroy established an apparent link between Grenke’s and CTP’s email servers, see their claim here: (12/n)
What Viceroy is intentionally omitting is of course that the email account belongs to CTP Holding GmbH, not CTP Handels- und Beteiligung GmbH. CTP Holding GmbH was established by Wolfgang Grenke in 2018 (maybe to take over CTP Handels- und Beteiligung GmbH given timing?). (13/n)
Hence CTP Holding GmbH had no relation to the franchise companies prior to 2020. Should Wolfgang Grenke have hosted the CTP Holding email account on Grenkes server? No. Is this a smoking gun? No. (14/n)
Number 7: There could have been a concerted effort to establish a link between Wolfgang Grenke and Sacoma AG prior to his taking over of the company in 2020. For example website http://business-monitor.ch"> http://business-monitor.ch showed the following fake entry when the short report was published. (15/n)
This indeed looks like a smoking gun - alas the entry is fake (and seems to have been corrected by now), as could be easily gleaned from the actual Swiss company register filings, showing that Wolfgang Grenke only joined Sacoma AG in 2020: (16/n)
What’s the likelihood of the http://business-monitor.ch"> http://business-monitor.ch entry being wrong for this particular company? Might someone with an interest in establishing a connection between Grenke and Sacoma have tempered with this entry before launching the report? (17/n)
Number 8: For the novice, banking regulation can be a thorny subject. However one should expect someone like Fraser Perring – who claims to have exposed the Wirecard fraud – to understand at least the basics. (18/n)
In its original report Viceroy asks why Grenke needed to issue a 75m EUR hybrid bond whilst having over 1bn EUR in cash on hand: (19/n)
Viceroy seems to be confusing the asset and the liability side of the balance sheet here: Grenke – as any financial institution – needs to fulfil certain capital adequacy ratios when doing business. (20/n)
This can be done by raising equity, retaining profits or issuing hybrid bonds and is regardless of the amount of cash on the asset side. Viceroy of course knows this, but it makes for great headlines anyway, right? (21/n)
Number 9: Viceroy also seem to believe that a bank’s deposits should equal its cash balance as implied here: (22/n)
That of course is nonsense: Commercial banks take the cash provided by customers deposits to hand it out as loans. Likewise, Grenke uses its deposits to fund the purchase of new leasing objects. (23/n)
The list goes on and on, the question is: If you have a valid point, why the need for so many lies? It would be great to have a more civilized discussion going forward. @viceroyresearch @unemon1 @FelixHoltermann @value_invest12
