Crisil and CARE share prices unaffected by media hype on SEBI probe

According to media reports, SEBI has initiated a probe against the top rating agencies Crisil and CARE on rating suspension. In case of any pending obligation on the securities, rating agencies are bound to hold back the withdrawal of ratings. The ratings can be suspended only in case of merger or closure.

The rating agency usually suspends ratings when the information provided by the issuer falls short of that required for rating. While the rating is withdrawn when the issuer requests, if the issuer ceases to exist or if the obligation is fully repaid.

CARE recently suspended its ratings on Amtek Auto’s bank facilities and non-convertible debentures as it failed to provide the adequate information required for scrutiny. CARE informed SEBI that it was not aware of SEBI probe in Amtek Auto.

Similarly, Crisil degraded rating on J P Morgan mutual fund schemes in a short span, and it drove the market sentiments. Crisil denied any intimation from SEBI regarding the matter and also no information regarding Morgan’s downgrade was given.

SEBI is yet to come up with an official note on this development, while certain media reports across the day have confirmed the move adopted by the regulator. The share prices of Crisil and CARE recovered after a slight correction in an intraday trade on Tuesday. Crisil closed 0.31 per cent up at Rs 2160.5; while CARE too closed up with 1.08 per cent gains at Rs 1005.25.