IL&FS case: Sebi fines ICRA, CARE Rs 2.5 mln each for poor due diligence
Markets regulator Sebi on Thursday imposed a penalty of Rs 25 million each on rating agencies ICRA and CARE for failing to exercise “due diligence” while assigning credit rating to the non-convertible debentures of IL&FS.
Sebi also said the default by IL&FS occurred due to “lethargic indifference and needless procrastination and laxity” of these rating agencies.
The case relates to the default committed by IL&FS and its subsidiary IL&FS Financial Services on their obligations in respect of the commercial paper, inter-corporate deposits (ICDs), as well as on interest payments related to the non-convertible debentures (NCDs).
The regulator undertook an examination with respect to the role of the credit rating agencies (CRAs), including CARE Ratings Ltd and ICRA Ltd, in assigning rating to various NCDs of Infrastructure Leasing and Financial Services (IL&FS).
