India Inc’s move to approach courts to prevent rating downgrades, and to seek a stay on payments or sale of pledged shares, has not gone down well with the Securities and Exchange Board of India (Sebi).
Sebi has asked lenders, mainly mutual funds (MFs), to act against firms taking the legal route to stave off payments or downgrades. The regulator’s directive comes after at least three companies —Indiabulls, Edelweiss, and Future Group — sought court action in such matters, amid the Covid-19 disruption. People in the know said fund houses and rating agencies first approached Sebi, highlighting the consequences to investors if courts issued adverse orders.
