Financial Daily from THE HINDU group of publications
Sunday, Oct 06, 2002
Financial Daily from THE HINDU group of publications Sunday, Oct 06, 2002 |
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Markets
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Economic Offences CSE scam — Rating agencies on alert after Srei official's arrest Nilanjan Dey
KOLKATA, Oct. 5 THE arrest of Mr Dinesh Jain, a senior executive of the Srei International group, by the Kolkata police in connection with the investigation into the Calcutta Stock Exchange scam has alerted credit rating agencies that have rated various instruments issued by the group flagship. The agencies would like to ascertain whether the arrest of Mr Jain, who was known to be playing a key role in securing and conducting business for his company, will affect the parent company's cash flow in any manner. The ratings assigned to Srei International Finance are for its fixed deposits, commercial paper, non-convertible debentures, etc. These have been rated by leading agencies such as Crisil (which has also assessed a structured obligation), CARE and Fitch. "The arrest per se is not an issue with us," Mr Sukanta Nag, in charge of CARE's local office, told Business Line, adding that the agency would like to keep an eye on the situation. Another agency (which does not want to be named) is already known to have made informal enquiries to find out the latest on the CSE situation. The Kolkata police had on Wednesday night picked up Mr Jain, MD of Srei International Securities Ltd (a subsidiary company), from his residence for his alleged involvement in certain dealings on the CSE. His arrest was later described by Mr Hemant Kanoria, MD of Srei International Finance, as a case of mistaken identity; the police, he said, came looking for Mr Jain's brother and had picked up the wrong man. The police, however, was not ready to confirm this theory. According to information put out in Srei's balance sheet for 2000-01, the various ratings are:
The company, according to local market sources, had been fairly active in raising fixed deposits although it has not been following an aggressive policy of mobilisation. As for Srei International Securities, the company has been mainly operating in NSE's WDM segment, and did not accept fixed deposits.
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