IL&FS fiasco: Sending ICRA executive on leave isn't enough; time regulator kicked off sweeping reforms for raters
5 years, 6 months ago

IL&FS fiasco: Sending ICRA executive on leave isn't enough; time regulator kicked off sweeping reforms for raters

Firstpost  

The international rating agency Moody’s Indian arm ICRA has done well to tick off its executive Naresh Takkar by sending him on leave pending an inquiry on the anonymous charge received by SEBI. The charge relates to top credit ratings given to IL&FS by a slew of credit rating agencies in India including ICRA. ICRA’s top brass must also be swiftly brought to account as the anonymous whistleblower seems to suggest that Takkar only went along with the top management’s indulgence of IL&FS. While this would be IL&FS specific, industry-wide reforms should include SEBI volunteering to bear the rating agencies fees among others.

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History of this topic

Sebi wants ratings agencies to rate all issuers
4 years, 6 months ago

Sebi wants ratings agencies to rate all issuers

Live Mint  

The Securities and Exchange Board of India is not in favour of a demand from credit rating agencies to let them withdraw ratings of uncooperative companies that fail to provide required information, two people aware of the matter said. Rating agencies last week wrote to Sebi and Reserve Bank of India that they wish to stop rating credit instruments and …

IL&FS scam: SEBI slaps Rs 25 lakh fine each on ICRA, CARE; flays rating agencies for failing to exercise due diligence
5 years ago

IL&FS scam: SEBI slaps Rs 25 lakh fine each on ICRA, CARE; flays rating agencies for failing to exercise due diligence

Firstpost  

The Securities and Exchange Board of India also said the default by IL&FS occurred due to “lethargic indifference and needless procrastination and laxity” of these rating agencies. New Delhi: Markets regulator SEBI on Thursday imposed a penalty of Rs 25 lakh each on rating agencies ICRA and CARE for failing to exercise “due diligence” while assigning credit rating to the …

SEBI mulls slew of reforms; tighter check on rating agencies, reward and hotline for informants
5 years, 4 months ago

SEBI mulls slew of reforms; tighter check on rating agencies, reward and hotline for informants

Firstpost  

New Delhi: With an aim to further safeguard investors’ interests and to take defaulters to the task, capital market regulator SEBI is planning to unveil a slew of reforms, including for greater checks on credit rating agencies and for rewarding informants in insider trading cases with up to Rs 1 crore reward. The regulator is also planning to ease its …

IL&FS case: SEBI widens investigation into role of rating agencies; looks into possible systemic lapses at all five rating agencies
5 years, 5 months ago

IL&FS case: SEBI widens investigation into role of rating agencies; looks into possible systemic lapses at all five rating agencies

Firstpost  

Grant Thornton said it identified multiple e-mails over the period from 2008 to 2018 which indicate that the IL&FS group was under stress or faced liquidity issues since 2015. New Delhi: Market regulator SEBI has expanded its probe into the role of five credit rating agencies after a forensic audit mandated by the new board of crisis-ridden IL&FS flagged serious …

Rating agencies, facing regulator's wrath for IL&FS tragedy, are left with a hard choice now
5 years, 5 months ago

Rating agencies, facing regulator's wrath for IL&FS tragedy, are left with a hard choice now

Firstpost  

In the Indian context, there are several examples where rating agencies failed to sense the imminent danger and continued awarding top ratings to firms in trouble only to witness payment defaults a few months later. Though the exact details aren’t known yet, it is understood that the investigation pertains to wrong rating calls given to the collapsed non-banking financial company, …

IL&FS case: Independent directors, rating agencies, auditors under Sebi lens
5 years, 6 months ago

IL&FS case: Independent directors, rating agencies, auditors under Sebi lens

Live Mint  

New Delhi: A large number of individuals and entities, including independent directors, top management personnel, rating agencies and auditors formerly associated with crisis-hit IL&FS may soon face action by capital market regulator Sebi for their role in the alleged fraud at the group. The matter is being probed by multiple agencies, including the Serious Fraud Investigation Office, which has also …

Moody’s India unit probing whistleblower charges on debt rating
5 years, 8 months ago

Moody’s India unit probing whistleblower charges on debt rating

Live Mint  

Mumbai/New York: Moody’s Corp’s India unit is investigating a whistle-blower complaint that executives at the ratings company interfered to guarantee top AAA ratings for a financier that plunged to default just two months later. ICRA Ltd is probing certain matters related to a debt rating it assigned to a client and its subsidiaries, the company disclosed Thursday in an earnings …

House panel raps rating agencies for not anticipating IL&FS situation
5 years, 11 months ago

House panel raps rating agencies for not anticipating IL&FS situation

Hindustan Times  

A parliamentary panel wants the finance ministry to spell out steps to make India’s credit rating agencies more accountable and transparent in the backdrop of the crisis at the highly rated finance firm Infrastructure Leasing & Financial Services. The panel wants the government to end the practice of agencies getting paid by the companies that want credit ratings, a business …

IL&FS crisis fallout: Sebi tightens disclosure norms for credit rating agencies
6 years, 2 months ago

IL&FS crisis fallout: Sebi tightens disclosure norms for credit rating agencies

Live Mint  

Mumbai: India’s markets regulator has tightened disclosure norms for credit rating agencies after they failed to warn investors in time about the deteriorating credit profile of Infrastructure Leasing and Financial Services Ltd. Credit rating agencies would also need to disclose if the company is expecting additional funds to pare its debt along with the name of the entity that will …

IL&FS fiasco, weak outlook take a toll on stocks of ratings agencies
6 years, 2 months ago

IL&FS fiasco, weak outlook take a toll on stocks of ratings agencies

Live Mint  

Mumbai: Rating agencies came under the spotlight following a series of defaults at Infrastructure Leasing & Financial Services Ltd, triggering liquidity concerns among non-banking financial companies. Sharing similar concerns, Edelweiss Securities Ltd said, “We believe bond markets will remain lacklustre and would thus continue to offset the positive impact of growth in bank loan ratings. “Management highlighted tough operating environment …

IL&FS crisis puts credit rating firms on SFIO radar
6 years, 2 months ago

IL&FS crisis puts credit rating firms on SFIO radar

Live Mint  

New Delhi: The Serious Fraud Investigation Office is looking into methods used by credit rating agencies as part of its probe into a series of defaults by Infrastructure Leasing and Financial Services Ltd. “SFIO is looking into the issue from the specific angle of how comprehensive they are,” Injeti Srinivas, secretary, ministry of corporate affairs, said on the sidelines of …

IL&FS crisis impact: Corporates return to banks for loans
6 years, 2 months ago

IL&FS crisis impact: Corporates return to banks for loans

Live Mint  

Mumbai: The tide seems to have turned in favour of commercial banks: the liquidity crunch following the IL&FS crisis has pushed corporate borrowers away from the bond markets, back to banks. Gupta said that as rate transmission in the bond market is quicker than in bank lending rates, the former has gone up following interest rate hikes, while the latter …

IL&FS misses more debt payments
6 years, 3 months ago

IL&FS misses more debt payments

Live Mint  

Mumbai/Singapore: Infrastructure Leasing & Financial Services Ltd. is missing more debt obligations, even as the Indian government pledged to prevent further defaults, underscoring the challenges its new board faces in fixing the firm’s mounting debt problems. “This amount is peanuts in the big picture, that’s how bad the situation is at the group,” said Rajiv Kochhar, chief executive officer of …

Govt’s rescue of IL&FS may spell major losses for lenders
6 years, 3 months ago

Govt’s rescue of IL&FS may spell major losses for lenders

Live Mint  

New Delhi/Mumbai: The government’s move to take control of debt-laden Infrastructure Leasing and Financial Services will only succeed if lenders agree to take substantial losses, government sources familiar with the discussions told Reuters. But IL&FS had compromised on corporate governance and risk management norms, the government told the National Company Law Tribunal on Monday as it explained why it intended …

IL&FS crisis: Can the new Uday Kotak-led bailout panel provide the magic touch to debt-laden firm?
6 years, 3 months ago

IL&FS crisis: Can the new Uday Kotak-led bailout panel provide the magic touch to debt-laden firm?

Firstpost  

Any move by the government or the regulators to protect the interest of a large financial institution like IL&FS and to address the contingent effects of the episode is a welcome move as it will help in regaining the market confidence. The Infrastructure Leasing & Financial Services debt saga has entered a decisive phase with the government dissolving the IL&FS …

How credit rating agencies missed the IL&FS crisis
6 years, 3 months ago

How credit rating agencies missed the IL&FS crisis

Live Mint  

Mumbai: Indian authorities have spent the week containing the collateral damage from a major infrastructure lender struggling to service $12.6 billion in debt. “We have not had this kind of a systemic event of this magnitude in the bond market before in India, and so we don’t really have a precedent as to how to deal with it,” said Kunal …

How NBFCs found themselves in the middle of a storm
6 years, 3 months ago

How NBFCs found themselves in the middle of a storm

Live Mint  

What were the first signs of trouble? On 17 September, rating agency Icra downgraded IL&FS’s credit rating to default, after it failed to meet repayment obligations of ₹ 12,000 crore in short-term and long-term borrowings. The market panicked after news emerged that DSP Mutual Fund was selling DHFL’s one-year ₹ 300 crore paper at 11%. It was a liquidity crunch, …

ITNL loan default first sign of cracks in IL&FS
6 years, 3 months ago

ITNL loan default first sign of cracks in IL&FS

Live Mint  

Mumbai: Rating firms decided against assigning a default rating on a ₹ 100 crore commercial paper of IL&FS Transportation Networks Ltd despite a delay in repayment in June, relying on the management’s pedigree and key shareholders of its parent Infrastructure Leasing and Financial Services Ltd. To be sure, the three rating agencies—ICRA Ltd, India Ratings and Brickwork Ratings—which rate the …

IL&FS rot needs to be stopped from spreading
6 years, 3 months ago

IL&FS rot needs to be stopped from spreading

Live Mint  

A tad late, but the message is finally reaching India’s regulators: Infrastructure lender IL&FS is not a business that can be allowed to fail without consequences. Some of the group’s finance companies are now missing repayments on short-term paper, even as the unlisted parent’s owners, including state-run Life Insurance Corp. of India, dawdle over an emergency infusion of funds. The …

ICRA junks Rs 12,000-cr of IL&FS' borrowing programmes; removes group entities from rating watch
6 years, 3 months ago

ICRA junks Rs 12,000-cr of IL&FS' borrowing programmes; removes group entities from rating watch

Firstpost  

IL&FS, which is credited for building the Chenani-Nashri tunnel, the longest in the country opened for traffic in April 2017, is sitting on an over a debt pile of Rs 91,000 crore and had been junked by rating agencies following the default. Mumbai: Domestic rating agency ICRA on Monday junked the short-term and long-term borrowing programmes worth over Rs 12,000 …

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