Credit ratings agency ICRA has dismissed its MD and CEO Naresh Takkar almost two months after the unit of Moody’s Investors Services had sent him on leave following an anonymous complaint it had received from Securities and Exchange Board of India (SEBI). The news sent ICRA’s shares down more than 2 per cent to Rs 2,738 on the BSE on Friday morning, even as the broader market was trading in the green. The BSE Sensex was up 0.5 per cent at 37,257.07 in morning trade.
Group chief financial officer Vipul Agarwal, appointed as the interim chief operating officer on July 1, 2019, will remain responsible for the day-to-day operations of the company until a CEO is appointed.
Credit ratings agencies have been under the scanner following the high profile default of Infrastructure Leasing and Financial Services (IL&FS) and a few of its subsidiaries, which has led to a huge liquidity crisis across the shadow banking sector. The large infrastructure lender reported series of defaults on its debt repayments from August 27, 2018. This shocked the market as until a few months ago, credit rating agencies had assigned high ratings on the company’s long-term loans and non-convertible debentures.
SEBI had rejected the settlement application filed with regards to the IL&FS case by ICRA.
An interim report on the forensic audit conducted by Grant Thornton had said last month that credit rating agencies consistently maintained good ratings for IL&FS until July-August 2018, even as there were many emails indicating that the group was under stress or faced liquidity issues since 2015.
The report further said IL&FS and its key employees managed to get favourable ratings or avoided the ratings being downgraded by offering gifts and favours to key employees in the credit rating agencies. That matter is still being investigated by SEBI.
also read
- Ravindra Balu Bharti: Here's why SEBI cracked whip on finfluencer, ordered him to pay Rs 12 crore
- How will T+0 settlement benefit investors and traders? SEBI to roll out beta feature on March 28
- Sebi asks mutual fund houses to protect investors in small, midcap schemes amid surging inflow
- Sebi warns brokers to be cautious against manipulations, says investor trust is important
CARE Ratings, which has also faced allegations in the case, had also sent its MD and CEO Rajesh Mokashi on leave pending examination of anonymous complaint it had received from the market regulator.
After the announcement of its quarterly results earlier this month, ICRA had said that SEBI had initiated adjudication proceedings related to credit ratings assigned to one of the company’s customer. ICRA’s board had also appointed external experts to examine and report on anonymous representations against its officials, which were forwarded by SEBI.
ICRA said late on Thursday it had decided to terminate the employment of Takkar effective immediately after taking into account the best interests of the company and its various stakeholders.
“ICRA remains committed to ensuring the independence and integrity of its ratings process and sound corporate governance,” it said.
