LAW FOR ALL

Credit Rating Agency (“CRA”) - appeal under Section 15Z of the Securities and Exchange Board of India Act, 1992 (“the SEBI Act”) is directed against the impugned judgment and final order dated 9th November, 2011 passed by the Securities Appellate Tribunal, Mumbai (“the SAT”), in Appeal No. 155 of 2011, by which the appeal filed by M/s Informetics Valuation and Rating Pvt. Ltd., (the respondent herein) was allowed, and the order dated 24th June, 2011 passed by the Whole Time Member of SEBI and communication dated 21st July, 2011 of the Securities and Exchange Board of India (”the SEBI”) was set aside. By the impugned order, the SAT has remanded the matter back to the appellant to consider the application of the respondent seeking registration Page 1 of 29Page 2 as a Credit Rating Agency (“CRA”) without requiring the respondent to produce Audited Annual Accounts of the respondent’s promoters for the two years ending December, 2010.- a CRA had been defined as a body corporate, which is engaged or proposes to be engaged in the business of rating of securities offered by way of public or rights issue. - Surprisingly, however, the Board continued to grant further time to the respondent to remove the objections even beyond the maximum sixty days permissible under the proviso to Regulation 6. It appears that the enquiries continued from 20th August, 2009 till March 1, 2011 when the show cause notice was issued to the respondent. The application of the respondent is not rejected till 21st July, 2011. The delay in the rejection of the application of the respondent was wholly unwarranted. It allowed the respondent a latitude not permissible under the regulations. Taking advantage of this latitude, the respondent has provided the Audited Accounts for the five years preceding the date of application. Not only this, we are informed that by now the respondent has even produced before this Court in a sealed cover the Audited Accounts of M/s. Coment (Mauritius) Limited for the subsequent two years upto 31st December, 2010 also. 29. Since the Board had extended the time to the respondent, even though not permissible in law, we are not inclined to modify the directions issued by the SAT. Especially in view of the submission of Mr. Suri that respondent is willing at this stage to produce the Audited Accounts of the promoter even for the subsequent two years. Page 28 of 29Page 29 30. In view of the above, we see no merit in the appeal and the same is hereby dismissed with no order as to costs.