HC allows ICRA to publish revised ratings on FLCI's debt instruments

By Our Corporate Reporter

CHENNAI, JUNE 24. The Madras High Court has allowed ICRA (Investment Information and Credit Rating Agency) to publish the revised ratings assigned to the medium and long term debt programmes of First Leasing Company of India (FLCI).

Actually, ICRA had downgraded the ratings assigned to the above instruments to MAA and LAA respectively (indicating high safety) from MAAA and LAAA (representing highest safety). This was decided at ICRA's committee meeting held six months ago (on January 14). However, ICRA had retained the A1+ (A1 plus) rating, indicating highest safety for the commercial paper programme at the same meeting. According to Mr. L. Shivakumar, AGM and Branch Manager, ICRA, the medium term instruments included fixed deposits and non-convertible debentures and the long term programme referred to debentures.

But the rating agency was restrained from publishing the revision in ratings in view of the status quo order passed by the High Court on a petition filed by First Leasing. Subsequently ICRA had prayed to the court for vacating this status quo order. The court, in its judgment pronounced on June 23, allowed the application, enabling ICRA to publish the revision in rating and dismissed First Leasing's application for injunction. The main suit C.S. 52 of 2000 is still pending with the Madras High Court.

Meanwhile, Duff & Phelps Credit Rating India in its release yesterday had stated that it had assigned ``highest safety'' ratings to the short term debt programme of FLCI for Rs. 35 crores and the fully convertible debenture (FCD) issue for Rs. 10 crores. The FCDs are convertible into equity shares after three years.

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Section  : Business
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