Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / News/  Moody’s India unit places CEO on leave amid whistle-blower probe
BackBack

Moody’s India unit places CEO on leave amid whistle-blower probe

Moody’s is investigating a whistle-blower complaint against its executives
  • ICRA has also decided to place CEO Naresh Takkar on leave
  • Credit raters in India such as ICRA have been criticized for missing warning signs like the infrastructure financier’s soaring debt load.Premium
    Credit raters in India such as ICRA have been criticized for missing warning signs like the infrastructure financier’s soaring debt load.

    MUMBAI : Moody’s Investors Service’s India unit has asked its chief to go on leave immediately amid its investigation into a whistle-blower complaint that executives at the company interfered to guarantee top ratings for a financier that plunged to default just two months later.

    ICRA Ltd.’s board has decided to place Chief Executive Officer Naresh Takkar on leave and appointed Group Chief Financial Officer Vipul Agarwal as interim chief operating officer, the company said in an exchange filing Monday evening. The company is examining the concerns raised in the whistle-blower complaint that was sent to it by the regulator.

    The rating company was probing certain matters related to a debt score it assigned to a client and its subsidiaries, ICRA said in May, without naming the client. ET Now television channel had reported that the complaint says the executives meddled to ensure systemically important Infrastructure Leasing & Financial Services Ltd. would receive a AAA rating, citing people it didn’t identify.

    Credit raters in India such as ICRA have been criticized for missing warning signs like the infrastructure financier’s soaring debt load, which jumped 44% between 2015 and 2018. The default of IL&FS sent shock waves across the country’s credit markets, triggering a liquidity crisis that is still reverberating among the shadow lenders. Investors are demanding nearly the highest premium in six years to hold non-bank financiers’ short-term debt.

    The New Delhi-based unit of Moody’s declined to comment while emails seeking comments from Agarwal and Takkar remained unanswered.

    IL&FS’s bonds and loans held AAA ratings until August 2018, when ICRA cut the issuer to AA+, the second-highest rank. A month later, a unit of the company defaulted on short-term debt obligations and ICRA hit the company with a 10-notch downgrade to BB, a junk grade. The shadow lender was cut yet again to D, a rating reserved for debt in default or expected to be in default in a matter of days.

    Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

    This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

    Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
    More Less
    Published: 02 Jul 2019, 01:50 PM IST
    Next Story footLogo
    Recommended For You
    Switch to the Mint app for fast and personalized news - Get App