Shares of CARE Ratings slipped up to 5 per cent on the BSE on Thurdsay after the firm sent its managing director and chief executive officer (MD & CEO) Rajesh Mokashi, on indefinite leave owing to a complaint received against him by the Securities and Exchange Board of India (Sebi). The stock was trading close to its 52-week low of Rs 851 touched on July 12, 2019 on the BSE in intra-day trade.
In a late night exchange filing, the ratings agency said that till the completion of the examination of an "anonymous complaint" received by the market regulator, the board has decided to send Mokashi on leave "with immediate effect until further notice".
"The Board has (also) decided to appoint Mr T.N. Arun Kumar, currently Executive Director (Ratings) as Interim Chief Executive Officer of the company... He will not be part of Rating Operations to ensure independence of ratings," it said. CLICK HERE TO READ THE BSE FILING
At 10:25 am, the stock was trading 4 per cent lower at Rs 870 apiece as against a 0.12 per cent fall in the benchmark S&P BSE Sensex. In comparion, shares of peer agencies were trading higher. Icra touched a high of 0.9 per cent while Crisil zoomed 3 per cent in the intra-day trade.
Rating agencies have come under the watchdog's lense ever since the fallout of Infrastructure Leasing and Financial Services (IL&FS). The non-banking finance company (NBFC), which went insolvent last year, had highest credit ratings by such agencies. India Ratings & Research, which is owned by Fitch Ratings, and Care Ratings had granted IL&FS AAA ratings, indicating the highest level of creditworthiness.
Sebi has launched adjudication proceedings against three rating agencies ICRA, Care Ratings and India Ratings in the ratings assigned to IL&FS and its group firms. The regulator is probing whether the agencies acted in an appropriate manner in issuing ratings to IL&FS group firms.
Early in July, Icra had sent its MD and CEO Naresh Takkar on leave afor similar reasons. READ HERE
So far in 2019, CARE Ratings has slipped 7.4 per cent as against a nearly 9 per cent rise in the BSE Sensex.