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Resilient says “rumour and innuendo” behind allegations of cockroach-infestation

In September 2014, UK retail group Tesco admitted it had overstated profit by £250m. That sparked master investor Warren Buffett into taking a $444m loss by dumping what remained of the Tesco stake he’d built up over the previous eight years. He learnt a good lesson though, and now runs at the first hint of scandal.

Although Buffett had been reducing his position in the year ahead of Tesco’s shock announcement, he admonished himself in the 2015 Berkshire Hathaway annual letter to shareholders because “in the world of business, bad news often surfaces serially: you see a cockroach in your kitchen; as the days go by, you meet his relatives.”

Time will tell how many cockroaches, if any, are hiding within the byzantine web of inter-related JSE listed property companies Resilient, Fortress, NEPI Rockcastle and Greenbay. But the now widely-circulated research report purportedly produced by asset managers 36One suggests it could be an army of them.

The property companies have denied any impropriety, claiming the report was issued without any comment from management and followed a campaign of “rumour and innuendo”. But unlike Capitec’s professional reaction to the recent Viceroy attack, we’ve seen no detailed public response from Resilient et al. That could be an expensive mistake should nervous shareholders decide to take the Buffett route.

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Source: biznews.com