The Ministry Corporate Affairs has reportedly asked its investigating arm Serious Fraud Investigation Office (SFIO) to probe the role of rating agencies in alleged fraud in various companies, including Infrastructure Leasing and Financial Services Ltd (IL&FS) group of companies.
The SFIO is looking into serious issues with governance framework and possible personal misconduct, CNBC-TV18 quoted a ministry official as saying. The report further stated that the SFIO is investigating governance issues such as rating a company based on its parent's credit profile or revising the rating with mala-fide intent.
Earlier today, the Enforcement Directorate (ED) discovered that the senior management of IL&FS interfered in its group firms' ratings review, seeking their upgradation on many occasions. While the rating agencies did alter the ratings of several companies, they did not take into account the undertakings' financial stress, the ED found.
As per the ED's investigators, then senior management of IL&FS comprising Ravi Parthasarathy, Arun Saha and Hari Sankaran used to engage in talks with credit ratings agency ICRA's analyst team to get "desired things".
Earlier this month, credit ratings ICRA sent its managing director and CEO Naresh Takkar on leave pending enquiry, reports said. The action was taken against anonymous complaints to SEBI alleging lapses in ICRA's high rating of AAA to IL&FS last year. Rating agency CARE also sent its managing director and chief executive Rajesh Mokashi on leave after similar complaints to SEBI.
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