After the Ministry of Corporate Affairs (MCA) and Serious Fraud Investigation Office (SFIO), now the Enforcement Directorate (ED) has discovered that the senior management of IL&FS interfered in its group firms' ratings review, seeking their upgradation on many occasions.
According to sources in the ED, who spoke to CNBC-TV18 on condition of anonymity, “investigations reveal that ratings of various IL&FS companies were likely to have been managed. Prima facie evidence also reveals that rating agencies were being used to give higher ratings."
The detailed investigation is still on and the agency will keep questioning the rating agencies, said the sources.
“Recent decision by rating agencies CARE and ICRA to send CEOs on leave linked to ED probe”, the ED sources told CNBC-TV18.
Earlier this month, credit ratings ICRA sent its managing director and CEO Naresh Takkar on leave pending enquiry, reports said. The action was taken against anonymous complaints to Sebi alleging lapses in ICRA's high rating of AAA to IL&FS last year. Rating agency CARE also sent its managing director and chief executive Rajesh Mokashi on leave after similar complaints to Sebi.
“Email exchanges and other evidence reveal that there was misconduct on behalf of rating agencies. IL&FS management was influencing ratings in lieu of favours. However ED will continue to probe in more details before it finalizes its report,” the ED sources said.
Meanwhile, the ED is currently investigating the role of Deloitte and will also examine the recent Grand Thornton report on the IL&FS matter, the sources added.
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