Care Ratings slips over 4% as MD and CEO sent on leave

Shares of Care Ratings declined over 4 per cent in early trade on Thursday after the company sent its managing director (MD) and CEO on leave after an anonymous complaint was filed against him at the Securities and Exchange Board of India (Sebi).

The scrip was down 4.35 per cent at Rs 867.30 at around 9.40 am (IST), while the BSE Sensex was trading 100 points, or 0.26 per cent, lower at 39,115 at around the same time.

“The board ….decided that pending the completion of the examination of the anonymous complaint, Rajesh Mokashi, MD & CEO” be sent on leave, CARE said in a late evening filing on Wednesday.

In his absence, the company has appointed TN Arun Kumar, now executive director (Ratings), as interim CEO of the company.

On July 2, ICRA, another rating company and the local affiliate of Moody’s Investors Service, sent its MD and CEO Naresh Takkar on leave, pending an enquiry into “anonymous" allegations against the executive.

Rating companies have been facing criticism amid a series of defaults over the past eight months. Critics believe rating companies delayed downgrading borrowers sufficiently before they missed deadlines on principal repayment or interest payment.

Infrastructure conglomerate IL&FS triggered first such criticism last year. Rating companies started cutting the creditworthiness of once-the-top-rated company drastically after it had failed to repay debt obligations.