New Delhi: CARE Ratings Ltd on Friday said Rajesh Mokashi stepped down as chief executive officer (CEO) and managing director (MD) of the company. This comes five months after Mokashi was, on 18 July, sent on forced leave, as anonymous complaint received by market regulator Securities and Exchange Board of India (SEBI) had alleged that ratings decisions were influenced by the management.
The board of CARE accepted Mokashi’s resignation in a meeting held today, the company said in a regulatory filing. “The same (resignation) is without prejudice to the ongoing examination of anonymous complaint forwarded to CARE Ratings and any action, if required to be taken pursuant thereto.”
A whistleblower complaint highlighting management interference in ratings of certain companies, including that of cash-strapped Infrastructure Leasing and Financial Services (IL&FS), had led to regulatory scrutiny of the company. CARE sent Mokashi on leave until the completion of investigation into the anonymous complaint.
After Mokashi was sent on leave in July, the board had appointed executive director T.N. Arun Kumar as the interim chief executive of the company.
Kumar will continue to serve as the interim chief executive of the company, as per today’s filing.
In July, another credit rating agency ICRA Ltd had sent its CEO and MD Naresh Takkar on leave, pending an enquiry into anonymous allegations against the executive. ICRA is local affiliate of global rating agency Moody’s Investors Service.
According to a Mint report, ICRA had sent Takkar on leave following an anonymous complaint, which alleged that there were lapses when it assigned a high rating of AAA to IL&FS last year.
In September 2018, IL&FS collapsed after it could not meet its debt payment obligations, sparking a liquidity crisis in the financial services market.
The complainant had alleged that ICRA’s top brass had meddled in assigning high ratings to IL&FS and its subsidiaries. ICRA had told stock exchanges that, based on SEBI’s reference, the rating firm was in the process of addressing the concerns raised in the anonymous complaint.