Tribunal cuts SEBI penalty on CARE to ₹10 lakh from ₹1 crore

Our Bureau Mumbai | Updated on June 15, 2021

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.

Published on June 15, 2021

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