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Delhi HC restrains ICRA from making public the credit score of Indiabulls Housing Finance

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The interim direction by Justice Sanjeev Sachdeva came on a plea to restrain ICRA Ltd from downgrading IHFL’s credit score for not providing some information sought by the credit rating company.

 The Delhi High Court Friday restrained a private credit rating company, ICRA Ltd, from making public the credit score of Indiabulls Housing Finance Ltd (IHFL) till April 6.

The interim direction by Justice Sanjeev Sachdeva came on a plea to restrain ICRA Ltd from downgrading IHFL’s credit score for not providing some information sought by the credit rating company.

The court also issued notice to securities regulator SEBI and ICRA seeking their stand on IHFL’s plea by April 6, the next date of hearing.

Till then the court restrained ICRA “from uploading any decision with regard to the credit rating of the petitioner (IHFL) on its website or giving effect to it”.

The direction came on IHFL’s plea claiming that ICRA was threatening to go ahead with the credit review despite a SEBI advisory of March 30 relaxing compliance with certain norms issued by the regulator.

IHFL has claimed that in the prevailing emergent situation “necessary requisite details” sought by ICRA for the credit review could not be provided.

The petition also said the Securities and Exchange Board of India (SEBI) had relaxed the time for providing such details in view of the lockdown due to the global coronavirus pandemic.

However, ICRA Ltd instead of giving more time to IHFL to provide the details was threatening to go ahead with the credit review and was proposing to downgrade the rating of Indiabulls Housing Finance, the petition has claimed.

IHFL has contended that if its credit score is downgraded, then it will have a serious negative impact on its financial standing and there was a likelihood that debenture holders may call for immediate redemption of the debentures.

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