New Delhi: Indian credit rating agency ICRA Ltd has terminated its managing director and group CEO Naresh Takkar.

“The board of directors of ICRA Limited, at a meeting today, after due consideration and taking into account the best interests of the company and its various stakeholders, has decided to terminate the employment of Mr Naresh Takkar as Managing Director and Group CEO of ICRA, effective immediately,” the company said in a statement to the stock exchanges on Thursday evening.

International credit rating agency Moody’s Investors Service is ICRA’s largest shareholder.

Takkar, who is a widely respected industry veteran, has been at the helm of the ratings agency for almost 10 years and was also recently appointed by the Reserve Bank of India as a member of its committee on the development of housing finance securitisation market.

In July 2019, the well-known ratings agency had sent Takkar on leave until further notice after receiving an anonymous complaint that had been forwarded to the company by capital markets regulator SEBI.

Also read: IL&FS and the La-La Land that is Indian Credit Rating

While ICRA did not declare what the complaint was about, several media reports at the time had indicated that it was connected to the IL&FS controversy. At the time, the agency declared that Takkar would be on a forced leave of absence until the company finished examining the concerns raised in the complaint that was forwarded by SEBI.

The company’s press release put out on Thursday, August 29, makes no mention of the complaint or its examination of  the same. It merely states that the ICRA board will now start  a search for his replacement.

“Mr Vipul Agarwal, who was appointed Interim COO on July 1, 2019, remains responsible for the day-to-day operation of the Company until a CEO is appointed. ICRA remains committed to ensuring the independence and integrity of its ratings process and sound corporate governance.” the statement notes.

In May 2019, media reports indicated that top ICRA officials were being probed by SEBI over allegations that it had influenced the ‘AAA’ rating on IL&FS. Reports at that time said a complaint had been sent to the market regulator over this matter.

A draft forensic analysis report by Grant Thornton India LLP -- commissioned by the IL&FS board, a copy of which is with The Wire -- appeared to lay out a chain of events in which senior ICRA officials including Takkar met with IL&FS’s management, the outcome of which may have mitigated a potential downgrade of ratings of the infrastructure financier.

However,  ICRA and other agencies have strongly contested the findings of the Grant Thornton report, noting that it shows no illegality and that is largely on the basis of "unverified information".

"We strongly urge to refrain from drawing conclusions about the role of Icra on the basis of unverified information contained in an interim report commissioned by the IL&FS Board, which largely ignores the alleged fraud perpetrated by former IL&FS management," ICRA said in a statement issued at the time.

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