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The Securities Appellate Tribunal has upheld SEBI’s order on CARE Ratings with regard to lapses in assigning credit rating to NCDs of Reliance Communications but reduced the penalty amount from ₹1 crore to ₹10 lakh.
“We affirm the order of the adjudicating officer with regard to the violation committed by the appellant ( CARE Ratings) under the provisions of the SEBI Act and the CRA Regulations. However, the penalty is reduced from ₹1 crore to ₹10 lacs,” SAT said.
RCom defaulted on the repayment of the principal amount of ₹375 crore and interest of ₹9.7 crore due in February 2017 and March 2017, respectively. In May 2017, CARE had downgraded RCom’s rating to default. SEBI imposed ₹1 crore as penalty after it found CARE to have failed to monitor the factors affecting the creditworthiness of RCom in a timely manner.
“There could be a case of carelessness or sluggishness or laxity in the manner in which the downgrading was done by the appellant (CARE Ratings) but it is not a case of oversight,” SAT said while reducing the penalty amount.
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