Complaint against CARE rating of Maheshwar project

Bhopal, Feb 27 (UNI) The Narmada Bachao Andolan has filed a complaint with the Securities Exchange Board of India against credit rating agency CARE for the rating of S Kumar's Shree Maheshwar Hydel Power Corporation's debentures for Rs 400 crore for violating SEBI norms.

Talking to reporters here today, NBA spokesman Alok Agarwal said CARE issued Triple A rating to the proposed optionally fully convertible debentures (OFCD) in flagrant contravension of SEBI regulations since the CARE Chairman P V Narasimham is also chairman of the SMHPC.

''The NBA has asked SEBI to immediately disqualify the rating and cancel the CARE registration in the light of the flagrant violation'', Mr Agarwal said, adding SEBI regulations prohibit credit rating agencies from rating securities issued by its associates.

CARE, while concealing material facts, based its rating on default guarantee by Power Finance Corporation and structured paymeent mechanism for facilitatiing timely servicing of debenture dues.

Mr Agarwal said CARE's claim that Maheshwar Project was in possession of techno-economic and environmental clearance was a misrepresentation since there was no CEA approval for the Rs 2449 crore financial package. It also concealed the important fact that the Environment and Forest Ministry had issued an order in June last year to stop the work on the project due to failure of the authorities to prepare a comprehensive relief and rehabilitation plan.

UNI