CARE settles case with Sebi, pays Rs 43 lakh

CARE Ltd today settled with markets regulator Sebi a probe into alleged violations of regulation pertaining to credit rating agency after paying a little over Rs 43 lakh.

Sebi agreed to settle proposed adjudication proceedings in the case, pertaining to violation of the CRA (credit rating agency) norms, after it was approached by CARE with a plea under the settlement regulations.

The settlement allows entities to settle charges by paying a penalty without admission or denial of guilt.

Earlier in January, Crisil had settled with Sebi a probe into alleged violations of regulation pertaining to credit rating agency after paying over Rs 28 lakh.

In July last year, the markets regulator had issued a show-cause notice to Crisil and Credit Analysis and Research (CARE) for not following proper process while evaluating the Amtek Auto debentures.

In a settlement order passed today, Sebi said it has disposed of the "adjudication proceedings initiated against the applicant -- CARE Ltd".

It was alleged in the show cause notice that CARE violated the provisions of the code of conduct stipulated in Sebi CRA (Credit Rating Agencies) regulations.

The Securities and Exchange Board of India (Sebi) had initiated adjudication proceeding against CARE. Pending adjudication proceedings, the rating agency had approached Sebi to settle the case on payment settlement charges.

Thereafter, Sebi's High Powered Advisory Committee recommended the case for settlement on the payment of a little over Rs 43.45 lakh. This was also approved by the regulators panel of whole-time members, following which it remitted the amount.

Accordingly, the regulator has disposed of the adjudication proceedings initiated against the rating agency.

It further said that enforcement actions, including restoring or initiating the proceedings, could be initiated if any representation made by the rating agency is found to be untrue.