SAT gives interim relief to Brickwork Ratings

The final hearing of the matter has been fixed for November 15. The SAT said in an oral order that Brickwork cannot take any new rating assignments until then.

The Securities and Exchange Board of India (SEBI) on October 7 canceled Brickwork Ratings’ license and barred it from taking on new clients and ceased operations in six months in the toughest regulatory action against any credit rating firm. was instructed.

The order listed various violations by Brickworks, including failure to document meetings with management, lack of independent analysis of financial projections given by companies, delay in recognizing defaults and conflicts of interest.

The Bengaluru-based company, promoted by Canara Bank, had earlier this week approached SAT seeking relief against the Sebi order. In its petition, the rating agency, represented by senior advocate Somashekhar Sundarsan, argued that the SEBI order is a ‘death sentence’.

“The order to deregister is a product of utter haste and tendency and is evident and prima facie arbitrary and distorted,” Brickwork said in its filing before SAT. A copy of the 200-page filing has been reviewed by Mint.

SEBI was represented by Senior Advocate Gaurav Joshi.

The rating agency also argued that it provides services to 8,420 borrowers, rates 8,684 instruments and employs 300 people and all these stakeholders have been affected by the regulatory diktat.