Shares of ICRA slipped nearly 6 per cent to Rs 3,027 apiece in the opening deals on Tuesday, a day after the board of rating agency asked its Managing Director (MD) and Chief Executive Officer (CEO) Naresh Takkar to go on indefinite leave, pending an enquiry into concerns raised by the market regulator the Securities and Exchange Board of India (Sebi).
At 09:28 am, the stock was trading nearly 4.50 per cent lower at Rs 3,074 on the BSE. Other rating agaencies' shares, too, were subdued in the trade. While Crisil was trading flat at Rs 1,462, up just 0.08 per cent, CARE Ratings was trading 1.65 per cent lower at Rs 925.75 apiece. In comparison, the benchmark S&P BSE Sensex was ruling at 39,715 levels, up 0.07 per cent.
Without disclosing specific reasons, the rating agency informed the stock exchanges that its board in its meeting on Monday decided to place Takkar on leave, effective immediately, until further notice pending the completion of the examination of the concerns raised in the anonymous representation that was forwarded to the company by Sebi. CLICK TO READ FULL REPORT
The report added this move was triggered by a whistleblower complaint sent to the market regulator Sebi against senior management interference in ensuring good ratings specifically in Infrastructure Leasing & Financial Services (IL&FS) and its subsidiaries.
The rating agencies have been under the scanner for not downgrading the commercial papers of IL&FS Financial Services (IFIN) despite weak financials. This rating had apparently given confidence to investors to buy debt papers of IL&FS and its subsidiaries, said a market expert.
In fact, the rating agencies had given IL&FS debentures “AAA” rating, the highest level of creditworthiness, until its subsidiary IL&FS Transportation Networks defaulted in June last year.