SREI vs Fitch: SEBI Intervenes
There is a new twist to the SREI versus Fitch battle currently going on in the Calcutta HC. Sebi has filed a petition in the HC asking to intervene in the case, reports CNBC-TV18's Payasiwni Upadhyay.
In April this year, SREI Infrastructure Finance had obtained a stay order from the Calcutta High Court against a rating downgrade by Fitch.Fitch had downgraded SREI’s financial instruments from AA- to A+. SREI had argued that since it had terminated its agreements with Fitch, the rating agency was no longer entitled to rate it and the downgrade was invalid. Calcutta High Court had granted this stay to SREI restraining Fitch from making the downgrade public. In all of this, SREI got a rating upgrade from another rating agency i.e. CARE.
Now, SEBI has come into the picture and filed a petition in the Calcutta High Court asking to intervene in the case. Not only that, SEBI has also asked the high court to vacate its stay on Fitch rating of SREI Infrastructure Finance.SEBI says that it is the statutory duty of rating agency to continue rating a security through the life of the security, even if its agreement has been terminated.SEBI also says that SREI cannot expect Fitch to upgrade its rating just because another rating agency has done so. The case will come up for hearing on July 11 at the Calcutta High Court.