Rajesh Mokashi, MD & CEO of CARE Ratings has relinquished his position almost five months after being sent on forced leave for alleged indulgence in favorable rating awarded to few NBFCs despite knowing their weak financials.
It may be recalled that in a whistleblower complaint filed with the markets regulator Security & Exchange Board of India (SEBI), highlighted a management interference in ratings of certain companies, including that of cash-strapped Infrastructure Leasing and Financial Services (IL&FS).
CARE sent Mokashi on leave until the completion of an investigation into the anonymous complaint.
Last Friday, Mokashi tendered his resignation to ICRA’s board of directors which was accepted.
The resignation is without prejudice to the ongoing examination of anonymous complaint forwarded to CARE Ratings and any action if required to be taken pursuant thereto.
After Mokashi was sent on leave in July, the board had appointed executive director T N Arun Kumar as the interim chief executive of the company.
Kumar will continue to serve as the interim chief executive of the company, as per today’s filing.
In July, another credit rating agency ICRA had sent its CEO and MD Naresh Takkar on leave, pending an inquiry into anonymous allegations against the executive.
ICRA is a local affiliate of global rating agency Moody’s Investors Service.
In September 2018, IL&FS collapsed after it could not meet its debt payment obligations, sparking a liquidity crisis in the financial services market.
The complainant had alleged that ICRA’s top brass had meddled in assigning high ratings to IL&FS and its subsidiaries.
The exit of Mokashi resulted in CARE Rating’s share price stabilizing at Rs 480 apiece after initial slide below Rs 475.
The share price has nearly halved since the management decided to send Mokashi on forced leave.
Net net we believe that the key challenge before care ratings is how it will face the challenging economic headwinds emerging from the Indian economy as a large part of its revenue gets generated from the banks and nbfc segments.
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