CFO Vipul Agarwal To Be ICRA’s Interim COO After MD & CEO Naresh Takkar Is Suddenly Sent On Leave As SEBI Probes IL&FS

The board of rating agency ICRA sent its Managing Director and Chief Executive Officer Naresh Takkar on indefinite leave suddenly as the Securities and Exchange Board of India (SEBI) began probing the rating agency in relation with the IL&FS faud.

The rating agency informed the stock exchanges that its board decided to send Takkar on leave immediately until further notice pending examination of concerns raised in an anonymous whistleblower representation which was forwarded to the company by SEBI.

The stock exchanges were also informed that the rating agency has appointed Chief Financial Officer Vipul Agarwal as its interim chief operating officer who will report to the board.

SEBI is already probing suspected ICRA senior management interference in ensuring good ratings for Infrastructure Leasing & Financial Services (IL&FS) and its subsidiaries.

SEBI has also launched adjudication proceedings against three rating agencies ICRA, Care Ratings and India Ratings for their roles in the favorable ratings assigned to IL&FS and its group firms.

In fact, the rating agencies had given IL&FS debentures “AAA” rating, the highest level of creditworthiness, until its subsidiary IL&FS Transportation Networks defaulted in June last year.

As a matter of fact, the credit rating agencies have been under the scanner for not downgrading the commercial papers of IL&FS Financial Services (IFIN) despite weak financials. This rating had apparently given confidence to investors to buy debt papers of IL&FS and its subsidiaries.

The market watchdog has been of the view that rating agencies should be able to pick up early signs of a crisis and issue a rating watch, followed by rating action.