Under regulatory glare, Icra sends its MD&CEO on forced leave

Domestic rating agency Icra Monday decided to send its managing director and chief executive Naresh Takkar on forced leave, pending an enquiry into the "concerns" raised by the capital markets watchdog Sebi. The agency has appointed chief financial officer Vipul Agarwal as the interim chief operating officer who will be reporting to the board, according to a statutory filing.

Action against Takkar has been taken "pending enquiry into the concerns raised in an anonymous representation, that was forwarded to the company by the Securities and Exchange Board", said the agency that is the majority by international rating agency Moody's. The action is effective immediately, the statement signed by chairman Arun Duggal said.

Though the agency did not share the exact reasons for the unprecedented step, which is a first in the industry, it can be noted that the move comes at a time when the rating agencies are under a cloud following the IL&FS debacle where the infra lender was enjoying top ratings right till the time of its first default in late August last year. A May 9 media report had said the Icra brass was being probed for influencing the 'AAA' rating on IL&FS and had hired KPMG to look into the allegations.

The IL&FS debacle spooked the credit markets immediately, triggering a liquidity crisis for the non- banking lenders in general, and the system is yet to come out of the stress despite investors losing thousands of crores. Takkar has been at the helm of Icra for long and was also recently appointed by the Reserve Bank as a member of its committee on the development of housing finance securitisation market, which is chaired by Bain & Co's Harsh Vardhan.