Market regulator Sebi on Thursday issued a winding up order against Brickwork Ratings citing "failure to exercise proper skill, care and diligence, while discharging its duties as a credit rating agency".
Sebi has also asked the credit rating agency to shut down operations within six months.
"In exercise of the powers contained under the SEBI Act, 1992 read with the SEBI (Credit Rating Agencies) Regulations, 1999, SEBI had carried out inspections of Brickwork for the periods April 1, 2014–September 30, 2015 and April 1, 2017–September 30, 2018. The contraventions /deficiencies observed in the first and second inspections led to initiation of separate adjudication proceedings against Brickworks," the order stated.
The market regulator further noted that the repeated lapses, noticed across multiple inspections conducted by it, shows that governance changes recommended in earlier inspections, and monetary penalties imposed have "not proved effective or deterred the Noticee (Brickwork Ratings) in addressing very basic requirements of running a CRA. "
Recently, the Supreme Court has allowed Sebi to conclude the proceedings for cancellation of Brickwork Ratings' licence for allegedly violating various credit rating regulations.
Brickwork is one of the seven Sebi-registered credit rating agencies. The others are Crisil, Care, Icra, Fitch, Infomerics Ratings and Acuité Ratings & Research.
