ICRA share price fell almost 5% in Friday's trading session after the rating agency terminated the employment of managing director and chief executive officer Naresh Takkar. The move comes at a time when the rating agency is under a cloud following the IL&FS crisis. Moody's Group owns 51.87% majority stake in ICRA.
Reacting to the news, there was a trend reversal in the stock after four days of consecutive gain. The share price of ICRA opened 3.50% lower at Rs 2,702 on BSE compared to its last close of Rs 2,800 and later fell 4.96% to the day's low at Rs 2,661.10.
The stock trades higher than 5-day moving average, although lower than 20,50,100 and 200-day moving average.
ICRA's stock price lost almost 7% in the last 3 months and fallen over 14 % in one month's period.
The Board of Directors of ICRA Limited, at a meeting today, after due consideration and taking into account the best interests of the Company and its various stakeholders, has decided to terminate the employment of Mr Naresh Takkar as Managing Director and Group CEO of ICRA, effective immediately," the company stated in the regulatory filing submitted yesterday after market hours.
"The ICRA Board will commence a search for a replacement. Mr Vipul Agarwal, who was appointed Interim COO on July 1, 2019, remains responsible for the day to-day operation of the Company until a CEO is appointed," the filing added.
On July 1 2019, ICRA Ratings, one of the leading credit rating agencies in India, had sent CEO and MD Naresh Takkar on forced leave, on the grounds of pending inquiry into the "concerns" raised by the Securities and Exchange Board of India. Following this, Chief financial officer Vipul Agarwal was named the interim chief operating officer.
The company said in May 2019 that it had hired an independent investigative agency to inquire into accusations of meddling in the rating of IL&FS.
Action against Takkar has been taken "pending an enquiry into the concerns raised in an anonymous representation, that was forwarded to the company by the Securities and Exchange Board of India, an anonymous complaint on the ratings of Infrastructure Leasing & Financial Services (IL&FS)," the rating agency had said in its earlier filings.
In May 2019, media reports had suggested that ICRA's top management was being investigated for influencing 'AAA' rating on IL&FS and had hired KPMG, a top accounting organisation to look into the allegations. IL&FS, which unexpectedly defaulted on repayments in September last year, had set off a liquidity crisis for non-banking financial companies (NBFCs) and threw the country's financial markets into turmoil.
Takkar was recently appointed by Reserve Bank of India as a member of its committee on the development of housing finance securitisation market, chaired by Bain & Co's Harsh Vardhan.
ICRA later said in its filing that it remains committed to ensuring the independence and integrity of its rating process and sound corporate governance.
Currently, as of 10: 30 pm, shares of ICRA are trading at Rs 2738, registering a decline of 2.21% on the BSE.
Edited by Rupa Burman Roy