ICRA fires CEO, stock tanks 3 per cent
The rating agency's Managing Director and Group CEO Naresh Takkar is being probed by various government investigation agencies for his alleged involvement in the IL&FS crisis.
ICRA's board decided to terminate Takkar with immediate effect and search for a replacement on Thursday. Earlier, the company had placed him on leave citing regulatory concerns. Meanwhile, Vipul Agarwal, Interim COO will remain responsible for the company's day-to-day operation until the appointment of the new CEO. The company has stated that ICRA remains committed to ensuring the integrity of its ratings process and maintaining sound corporate governance.
After the crisis, government has appointed a new board led by Uday Kotak at Infrastructure Leasing & Financial Services Ltd (IL&FS) to resolve the issues faced by the company. The board appointed Grant Thornton to conduct a forensic audit of IL&FS accounts. The audit inferred that higher ratings given by various credit rating agencies to IL&FS and group companies' debt instruments facilitated excessive borrowings from money markets, which eventually caused to a series of defaults leading to the ultimate collapse of the financial organisation.
Serious Fraud Investigation Office (SFIO), Enforcement Directorate (ED) are also investigation the IL&FS Group companies for alleged money laundering charges and probing end-utilisation of loans granted by the company. As part of the investigation, the role of rating agencies, audit firms are also being investigated.
On Friday, the stock of ICRA Limited was trading at Rs. 2,705.75 per share, down by Rs. 94.25 or 3.37 per cent at 11:40 hours on BSE.