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Brickwork Ratings has said that it is considering “appropriate legal recourse”, a day after capital market regulator SEBI directed the credit rating firm to wind down operations within six months, citing repeated lapses and violations.
The rating agency has expressed disappointment at Sebi’s ruling. “Brickwork Ratings is fully cooperating with the authorities to ensure all compliances are satisfactorily met. In parallel, the company is also considering appropriate legal recourse in the matter,” it said in a statement.
In a rare order on Thursday, the Securities and Exchange Board of India (SEBI) cancelled Brickwork’s registration certificate, highlighting several violations by the rating agency.
The market regulator also prevented the rating agency from taking on new clients, saying multiple probes found violations such as delay in recognition of default of non-convertible debentures and failure to review ratings even after receiving information about delayed payments.
‘Allegations, a shocking development’
Under such circumstances, Brickwork Ratings said it finds the recent allegations to be a shocking development.
“Brickwork Ratings finds the recent allegations to be a shocking development,” it said in a statement late on Friday, adding it had taken “timely course correction measures” in line with regulatory instructions.
According to the statement, Sebi’s suggestions pursuant to prior inspections had always been taken in the right spirit and that the company has implemented robust software development to address some of the issues.
“In addition, timely course correction measures have been taken to align with regulatory instructions and industry best practices. Brickwork Ratings has always striven to ensure compliance to the highest standards in its rating practices with strong internal checks and balances throughout,” it further said.
The regulator has said it investigated Brickworks on several occasions and had undertaken a joint inspection with the India’s central bank.
SEBI has been tightening disclosure rules for credit rating agencies since 2016 in a bid to boost transparency and accountability after a number of sudden sharp changes to corporate ratings.
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John Miller has been writing about science, gaming, and tech culture for over a decade. He’s a top-rated reviewer with extensive experience helping people find the best deals on tech and more.
