Mainak resigns as CARE Ratings chief after Sebi asks for his removal

S B Mainak has resigned as chairman of CARE Ratings, the company said in a stock exchange notification after the market regulator reportedly asked for his removal.

The Securities and Exchange Board of India (Sebi) nudged the rating agency after a forensic report said Mainak had asked his staff to not change the ratings of Infrastructure Leasing and Financial Services (IL&FS), the bankrupt shadow banker, the Economic Times reported on Thursday.

Consultancy firm EY earlier this week gave Sebi a report recording employee statements, WhatsApp messages and call recordings of CARE employees.

Mainak, a former managing director of Life Insurance Corporation, was an independent director and chairman of CARE Ratings. In December, CARE’s managing director and chief executive officer (MD & CEO) Rajesh Mokashi resigned after a whistleblower complaint alleged management interference in ratings of companies, including IL&FS.

In August 2019, Moody’s India arm ICRA sacked its MD & CEO Naresh Takkar after whistleblower allegations.

Sebi, in December, fined CARE, ICRA and India Ratings Rs 25 lakh each for violating regulations on assigning ratings to non-convertible debentures (NCDs) of IL&FS. Sebi rarely asks companies to remove top officials but it has a lot of say when it comes to key appointments at market intermediaries such as stock exchanges, depository participants and credit rating agencies. 

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel