Sebi orders CARE Ratings to pay ₹13.05 lakh as settlement money for alleged violations

The capital markets regulator Securities Exchange Board of India (Sebi) has passed a settlement order in respect of CARE Ratings, asking it to make the payment of ₹13.05 lakh towards the settlement.

The action was taken as part of an adjudication proceedings for alleged violation of clause 1(B) of Sebi circular dated June 30, 2017 on Monitoring and Review of Ratings by Credit Rating Agencies (CRAs) and clause 8 of Third Schedule - Code of Conduct read with Regulations 13 of Sebi (Credit Rating Agencies) Regulations 1999.

Sebi had appointed Barnali Mukherjee as the adjudicating officer to inquire into the alleged violations mentioned above.

It is worth mentioning here that the Sebi’s internal committee meeting was held on May 29, 2024 which considered the factors enumerated under regulation 10 and schedule II of Sebi (Settlement Proceedings) Regulations 2018.

The committee recommended ₹13.05 lakh as the monetary settlement term.

The applicant had submitted the revised settlement terms in line with the monetary term formulated by the IC. Consequently, the IC recommended the case for settlement.

How it unfolded?

I. Sebi appointed an adjudicating officer to inquire into the violations by CARE Ratings.

II. A show cause notice was issued to CARE Ratings to show the cause as to why an inquiry should not be held and penalty be not imposed upon it.

III. While these proceedings were pending, the applicant proposed to settle the proceedings without admitting or denying the findings of facts.

IV. Following this, an internal committee was held on May 29, 2024 which recommended ₹13.05 lakh as the monetary settlement term.

V. The application was subsequently placed before the High-Powered Advisory Committee (HPAC) on June 14, 2024 which agreed with these recommendations.

VI. In view of the acceptance of the settlement terms and receipt of the amount, the proceedings initiated against CARE Ratings were disposed of.

Meanwhile, the order mentions that the order is without prejudice to the right of Sebi to take enforcement actions including restoring or initiating the proceedings in respect to which the settlement order was passed against the applicant if it comes to the notice of the board that the applicant has not made full and true disclosure or if the applicant has violated the undertakings or waivers.

This settlement order signed by Barnali Mukherjee was passed on Friday i.e., August 23, 2024.