CARE Ratings Sends CEO On Leave, Inquiry Left Incomplete

The credit rating agency CARE said it has sent it’s managing director and chief executive Rajesh Mokashi on leave. This results into the pending of completion of the examination of an anonymous complaint received by the Securities and Exchange Board of India (SEBI).

“The board of directors of CARE has decided to appoint T.N. Arun Kumar, currently executive director (Ratings) as interim chief executive officer (“CEO”) of the company. He will not be part of rating operations to ensure independence of ratings,” said CARE in stock exchange filing late Wednesday evening.

Earlier this month, credit rating agency Icra Ltd, the local affiliate of Moody’s Investors Service, had sent its managing director and chief executive Naresh Takkar on leave, pending an enquiry into “anonymous” allegations against the executive.

Mint had reported that the step was taken following an anonymous complaint, which alleged that there were lapses when Icra assigned a high rating of AAA to IL&FS last year.

Last September, IL&FS defaulted on its debt payments, triggering a liquidity crisis in the financial services market.

The complainant had alleged that Icra’s top brass had meddled in assigning high ratings to IL&FS and its subsidiaries. Icra, in its earnings statement on 9 May, had told exchanges that based on Sebi’s reference, the rating firm was in the process of addressing the concerns raised in the anonymous complaint.

Biz, Business