Sinha asks cos not to interfere with rating methodologies
The comment comes a day after the rating agencies met Sebi to discuss the issue of companies suing the agencies. It was not unusual for companies to slap legal notices on rating agencies for downgrading or assigning negative rating which, in turn, led to litigation that ate into the fees of the agencies.
“It is the bounden duty of rating agencies to inform investors about the change in the status of a company or an instrument that they have rated. So our aim will not only be to help the industry but also to ensure investors' interest is being taken care of. In the context from the feedback we received yesterday from our discussions with the rating agencies, we will be soon taking up the issues,” said Sebi chairman UK Sinha on the sidelines of the third India Securitisation Summit 2012 organised by National Institute of Securities Markets.
Sinha stated that if the companies are raising money from the general public — whether retail or institutions — they should be willing to follow the rules of the game rather than being upset if the rating is downgraded.
Sinha said he expected such companies to act maturely and not rush in dragging rating agencies to court. “I am also
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