India's CARE Ratings sends CEO on leave pending inquiry (updated)

ICRA

18/07/2019 06:42

(Adds CEO declined to comment, background)
    BENGALURU, July 18 (Reuters) - India's CARE Ratings Ltd
 CREI.NS  has placed Chief Executive Officer Rajesh Mokashi on
leave until further notice, the company said https://www.bseindia.com/xml-data/corpfiling/AttachLive/a293c7b7-2b91-4753-b828-d1344151de8f.pdf
 late on Wednesday, making it the second rating agency to do so
amid regulatory concerns.
     Earlier this month, ICRA Ltd  ICRA.NS , the Indian unit of
Moody's Investors Service, placed its Chief Executive Officer
Naresh Takkar on leave after SEBI forwarded concerns raised
anonymously to the company.  urn:newsml:reuters.com:*:nL4N242337
    CARE said Mokashi would be on leave until the company had
examined an anonymous complaint against him sent to the
Securities and Exchange Board of India (SEBI).
    The agency appointed T.N. Arun Kumar, currently executive
director of ratings, as interim CEO.
    "He (Kumar) will not be part of rating operations to ensure
independence of ratings," CARE said in an exchange filing.
    CARE did not respond to an email seeking further comments,
while Mokashi declined to comment.
    Fellow rating agency ICRA said in May it had appointed
external experts to probe the anonymous complaint concerning the
credit rating it assigned to one of its customers and its units.
    Media report https://www.livemint.com/companies/news/under-regulatory-glare-icra-sends-its-md-ceo-on-forced-leave-1561989282979.htmls
 earlier suggested the complaint on ICRA was about interference
by the rating firm's top executives in assigning top
investment-grade ratings to Infrastructure Leasing and Financial
Services Ltd (IL&FS) and its subsidiaries last year. Reuters
could not independently confirm these charges.
    The government has removed IL&FS' management and took
control of the company after the provider of infrastructure
financing defaulted on a series of debts.
    Apart from ICRA, India Ratings & Research, which is owned by
Fitch Ratings and CARE Ratings had also granted IL&FS ratings to
show the highest levels of creditworthiness.
    The string of defaults triggered fears about contagion in
the financial sector and spooked investors both in the equity
and debt markets in the recent past.
    Shares of CARE Ratings fell as much as 5.8% on Thursday,
before recouping slightly to trade down 4% at 869.85 rupees at
0513 GMT.

 (Reporting by Chandini Monnappa in Bengaluru, additional
reporting by Abhirup Roy in Mumbai; Editing by Subhranshu Sahu
and Gopakumar Warrier)
 ((chandini.m@thomsonreuters.com; +91-82-6749-7919; Reuters
Messaging: chandini.m.thomsonreuters.com@reuters.net))