This refers to “How raters played ball with IL&FS brass” (July 20). The Grant Thornton report shows very disturbing things. The concerned credit rating agency was allegedly influenced and threatened to maintain/modify/delay the ratings of IL&FS despite its very steadily deteriorating financial position. Earlier there were reports that executives of credit rating agencies were allegedly materially induced for this purpose.
This raises fundamental issues in the financial system. If auditors can be induced to gloss over serious irregularities and give reports that do not reflect the true financial position of a company and credit rating agencies can be forced to give favourable ratings despite bad financial conditions of companies, what is the sanctity of auditing and credit rating processes?
Based on audit reports and credit ratings, everyone takes crucial decisions. These decisions will be based on false premises because of dodgy audit reports and false credit ratings. The government and regulators need to move quickly to set right these anomalies in the financial system. Otherwise, stakeholders in the country and investors abroad will lose respect for these processes in our financial system.
Arun Pasricha, New Delhi