The market regulator ordered Brickwork Ratings India Pvt. to wind down its operations within six months for violating regulatory norms.
The regulator cancelled Brickwork's certificate of registration as a credit rating agency, according to the Securities and Exchange Board of India's order. It's the first rating agency in India to lose its licence.
Brickwork failed to exercise proper skill, care and diligence while discharging its duties as a credit rating agency, which has defeated the very purpose of regulations, according to the order.
Governance changes recommended in earlier inspections by the market regulator, and monetary penalties imposed have not proved effective or deterred Brickwork in addressing very basic requirements of running a credit rating agency, it added.
SEBI took action under Section 19, read with Section 12(3) of the SEBI Act, and regulation 27 of the Intermediaries Regulations.
Brickwork is also barred from taking on new clients or fresh mandates.
Acknowledging the directive issued SEBI, Brickwork Ratings expressed "disappointment" at the ruling and said that it is considering appropriate legal recourse in the matter.
"Brickwork Ratings finds the recent allegations to be a shocking development," it said in a statement.
It is fully cooperating with the authorities to ensure all compliances are satisfactorily met, it added.
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