The second largest credit rating agency in Sri Lanka, ICRA Lanka Limited (ICRA Lanka), has decided to cease operations, a senior company official told Finance Today.
“We will cease operations within the next month” he said. He claimed that the poor state of Sri Lanka’s economy is primarily to blame.
ICRA Lanka is a fully owned subsidiary of ICRA Limited (ICRA) of India. The company was granted a license by the Securities and Exchange Commission of Sri Lanka (SEC) in May 2011.
The ultimate parent company of the international credit rating agency, Moody’s Investors Service, is ICRA’s indirect majority shareholder.
It is also claimed that the parent company’s ownership shift in India also resulted in the shutdown of its activities in Sri Lanka. Moody’s Investors Service also expressed concerns about the company’s activities in Sri Lanka, citing the country’s unpredictable economic environment.
Around 75 leading corporates in Sri Lanka, including Hayleys PLC and Softlogic Holdings PLC, were obtaining credit and debt rating services from ICRA Lanka. Commercial banks such as Bank of Ceylon, People’s bank and NSB and non-bank financial institutes were among them.
According to reports, Lanka Rating Agency Limited (LRA), a local credit rating agency, is attempting to regain their clients following the closure of ICRA Lanka. ICRA Lanka was also supported by a Technical Services agreement with ICRA, wherein the parent company provides operational support and resources.
Fitch Ratings is Sri Lanka’s leading credit rating agency.