SEBI imposes fine, India ratings in case. Stock Market News.



SEBI imposes fine on ICRA, CARE, India ratings in IL & amp; FS case.


New Delhi: Capital market regulator SEBI has fined ICRA, CARE and India Ratings & Research for negligence while issuing ratings to its non-convertible debentures (NCDs) in the case of IL& FS, which is facing a financial crisis. All these have been separately fined Rs 25 lakh. SEBI has said that the default in payment on behalf of the company arose due to the lax attitude, carelessness and laxity of the rating agencies.


The regulator has issued separate orders for the three rating agencies, imposing a fine of Rs 25 lakh on all three using the same terminology. The case relates to the default of IL& FS and its associate company IL& FS Financial Services, under which the company was unable to pay interest related to commercial papers, inter-corporate deposits and NCDs.


The market regulator reviewed the investigative role played by credit rating agencies (CRAs). Care ratings and ICRA were also included in this. The regulator examined the role of some other agencies including Care Ratings Limited, Icra Limited and India Ratings.


According to SEBI, the financial parameters of IL& FS and the group companies, especially their short-term debt, debt-equity ratio, current maturity of long-term debt, operating profit, were not as favourable as these agencies assessed in their report was.


The IL& FS crisis came to light in September last year. After that, the government sacked the company's board and announced a new board. Since then, the company and its units are under regulatory scrutiny.


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