MUMBAI, May 25: Ratings firm Credit Analysis and Research Limited (CARE) has ordered an internal probe to find out the accuracy of the financial details which CRB Capital Markets had furnished to it.This is for the first time the rating agency, which had so far justified an investible rating for CRB Caps, has done a rethink on the matter.

The agency, which is promoted by the Industrial Development Bank of India, held a special board meeting last week presided by Industrial Development Bank of India chairman SH Khan to deliberate on the controversial ratings that favoured CRB Caps' market borrowing.

Credit Analysis and Research Limited's rating committee, which made the final approval for all its ratings, is headed by eminent chartered accountant Malegam.

According to a source, the agency will wait for the liquidator's report before making its clarification on the favourable ratings given to CRB Caps before it went into liquidation.

``Though we are trying to detect the error on our ratings, we have no details about the company as of now as the documents are in custody of the liquidator,'' a senior official at Credit Analysis and Research Limited said.

``The liquidator's report on assets and liabilities of the company, which will be made public shortly, will be more authentic than the one certified by the company's auditor,'' he said. ``This will prove whether the details provided to us on the basis of which we rated were malafide or not,'' he added.

CRB Caps, till recently the second largest non-banking finance company after Reliance Capital, was rated on the basis of its financial ratios and capital adequacy ratio, which was provided by the company since 1994, the official said.

``On the basis of available figure at the the time of rating, we feel the rating could have been still higher,'' he added.

The agency had tried to collect information about any default by the company from the market, which was not available. ``The rating agency has already asked its officials to prepare a case study to avoid further fiascos and to change the method of seeking any company's information in future,'' said another official at Credit Analysis and Research Limited.

``We would like to know what the triggering point of the fiasco was and in what way our rating can be linked to this,'' the officials added.

Even a deliberate fraud by the owner cannot be ruled out, in which case it would not be proper to blame the rating agency, they said. That the company is just rating one instrument, which cannot be held responsible for the collapse of the entire company, the officials said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.