Crisil free of irritants over confidentiality

The world's largest global rating agency, Standard & Poor's taking control of Crisil will help remove irritants the domestic rating agency faces over the issue of client confidentiality.

On day one of Crisil becoming a subsidiary of S&P, R Ravimohan, managing director of the domestic rating agency, expressed excitement as the change in the shareholding structure now cements the 10-year strong relationship.

"This is a positive development as it will help remove the irritants we faced with regards to working with S&P clients," he said.

Even as India has emerged as an important economic power, the minority stake was limiting S&P from extending its relationship, given the proprietary nature of the methodologies and systems, said Kathleen A Corbet, president of S&P.

In undertaking S&P client work, Crisil was forced to rely totally on publicly available information, as clients would not be comfortable sharing forward-looking statements with the domestic rating agency.

This will now change since S&P's stake has risen from 9.45 per cent to a little over 51 per cent through the conditional open offer.

S&P also proposes to "pour in a lot of resources" and make it a part of the group network as Harold MCGraw III, chairman, MCGraw-Hill, the holding company of S&P, said during his visit to Mumbai in March.

S&P had earlier stated that Crisil would become a critical component of the Asia Pacific region and would help tie together what is already a large presence in all key financial markets in Asia.

S&P has offices in Tokyo, Taiwan, Beijing, Hong Kong, Singapore, Melbourne and Sydney - with affiliates in Malaysia, Taiwan and Indonesia. S&P hopes to undertake greater cross distribution of its products and services in terms of distributing S&P services in India and Crisil's expertise overseas.

Ravimohan added that Crisil's expansion plans overseas would not be affected by S&P taking over control.

Crisil is looking forward to working more closely with S&P. "The scope of engagement will broaden, and we can work jointly with S&P globally," said Ravimohan. When Crisil expanded operations in the Caribbean rating agency, it was with S&P's full knowledge and the joint venture there has a S&P board representative.