India Ratings defends rating process for IL&FS group entities after audit flags misconduct
India Ratings refuted the Grant Thornton report, saying that it is based on partial and selective source material from IL&FS and demonstrates a limited understanding of the credit rating process
- Jul 21, 2019,
- Updated Jul 21, 2019 12:20 AM IST
India Ratings said that its ratings for IL&FS group companies followed a robust and transparent analysis of relevant information including the company's audited financial statements. The statement came in the backdrop of an interim forensic audit report by Grant Thornton which alleged that rating agencies continued to give top ratings to IL&FS group entities despite being aware of the weak financials of the group.
The Grant Thornton audit report on the role of credit rating agencies engaged by the erstwhile IL&FS management flagged several cases amounting to potential favours and gifts given to senior officials of the agencies and even their family members to get favourable ratings. CARE, ICRA, India Ratings and Brickwork were the main rating agencies for IL&FS Transportation Networks (ITNL), IL&FS Financial Services (IFIN) and IL&FS during the period covered in the report.
IL&FS case: Senior management swayed ICRA ratings; asked it for 'desired things', finds ED
India Ratings, a 100 per cent owned subsidiary of Fitch Ratings, further stated that its investigation into the role of a senior director at its parent firm's Singapore office found him in violation of the company's code of conduct. "The employee is no longer employed at Finch," PTI quoted the India Ratings spokesperson as saying.
(With PTI input)
India Ratings said that its ratings for IL&FS group companies followed a robust and transparent analysis of relevant information including the company's audited financial statements. The statement came in the backdrop of an interim forensic audit report by Grant Thornton which alleged that rating agencies continued to give top ratings to IL&FS group entities despite being aware of the weak financials of the group.
The Grant Thornton audit report on the role of credit rating agencies engaged by the erstwhile IL&FS management flagged several cases amounting to potential favours and gifts given to senior officials of the agencies and even their family members to get favourable ratings. CARE, ICRA, India Ratings and Brickwork were the main rating agencies for IL&FS Transportation Networks (ITNL), IL&FS Financial Services (IFIN) and IL&FS during the period covered in the report.
IL&FS case: Senior management swayed ICRA ratings; asked it for 'desired things', finds ED
India Ratings, a 100 per cent owned subsidiary of Fitch Ratings, further stated that its investigation into the role of a senior director at its parent firm's Singapore office found him in violation of the company's code of conduct. "The employee is no longer employed at Finch," PTI quoted the India Ratings spokesperson as saying.
(With PTI input)