Sebi slaps Rs 1 crore fine on CARE Ratings in RCom case

Securities and Exchange Board of India has imposed a penalty of Rs 10000000 on CARE Ratings for due diligence lapses in the matter of Reliance Communications( RCom).The case relates to RCom’s default on the repayment of almost Rs 3850000000 in early 2017.The regulator alleged that CARE had failed to monitor the factors affecting the creditworthiness of RCom in a timely manner, resulting in significant delay in conducting the rating process and downgrading the rating,It further alleged that the rating agency failed to initiate a review of its earlier ratings assigned to Reliance Communications even after the publication of third quarter results in FY17 which showed a major decline in cash accruals affecting its credit profile.It also did not receive a 'no default' statement from Rcom, despite it being a crucial document for conducting review of quarterly financials of an entity, Sebi said in an order.