Infomerics Valuation and Rating, a credit rating agency (CRA), has paid Rs 57.63 lakh to settle allegations of violating the Credit Rating Agencies (CRA) Regulations. The settlement order was issued by the Securities and Exchange Board of India (SEBI) on Friday.
Details of Allegations
SEBI conducted an inspection of Infomerics for the period from February 1, 2022, to January 31, 2023, uncovering alleged irregularities:
- Lack of Adequate Disclosure:
Infomerics failed to disclose detailed explanations of covenants and assessments of credit enhancement structures in press releases, violating a SEBI circular from June 13, 2019. The affected press releases included:- Lucina Land Development Limited (January 30, 2023)
- Thane Creek Bridge Infrastructure Limited (February 13, 2023)
- Cadence Enterprises Private Limited (December 30, 2022)
- Indiabulls Infraestate Limited (January 18, 2023)
- Tapir Constructions Limited (October 31, 2022)
- GMR Enterprises Private Limited (December 30, 2022)
- Misuse of Credit Enhancement Suffix:
Infomerics incorrectly assigned a ‘Credit Enhancement (CE)’ suffix to securities issued by GMR Enterprises Private Limited and Cadence Enterprises Private Limited, violating SEBI’s June 13, 2019 circular and CRA Regulations.
Regulatory Actions and Settlement
Thereafter, an application for settlement was filed by Infomerics and accordingly, hearings were held by the HPAC of SEBI. HPAC proposed a settlement amount of Rs 57.63 lakh along with directing action against the entities responsible for the violations.
The terms of the settlement had been approved by SEBI’s Panel of Whole-Time Members, and Infomerics confirmed the compliances as far back as October and December 2024. These related to the violations of Regulation 13 of CRA Regulations, 1999, and certain clauses of the Third Schedule thereof, read with the circular issued by SEBI vide no. dated June 13, 2019.
The settlement, therefore, concludes the regulatory action by SEBI and ensures compliance with CRA regulations henceforth.
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Source: Moneycontrol
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