The rating agency has challenged Sebi’s decision to reject its settlement application before the Karnataka High Court alleging that the regulator hadn’t given the firm a proper hearing, said one of the two people quoted above.
Earlier, Sebi had issued a show-cause notice to Brickwork Ratings, asking why its licence should not be cancelled for repeated lapses in the credit rating process. ET in its edition dated April 30, 2021, had reported about the regulator’s notice to Brickwork Ratings.
The rating agency recently filed a second writ petition before the Karnataka High Court seeking to halt Sebi’s legal proceedings against it. The court will hear the matter on October 29.
After the IL&FS fiasco, Sebi and RBI jointly conducted inspections of credit rating agencies. The regulators checked whether due process was followed during rating exercises and if all rules have been adhered to in the process.
Sebi observed several lapses during its inspection of Brickwork’s rating process, said one of the two people. In the past, the regulator had asked the rating agency to put in place systems and processes.