China Rating Firm Banned as Regulators Cite Fake Info, Chaos
- CSRC, NAFMII stop Dagong from rating business for one year
- Most severe punishment for a Chinese rating firm so far
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Dagong Global Credit Rating Co. issued an apology after it was banned by Chinese regulators from assessing bonds for a year, the most severe punishment ever doled out to a ratings company.
Dagong’s management was "chaotic", the China Securities Regulatory Commission said on Friday, when it announced the penalty. The National Association of Financial Market Institutional Investors, which oversees short- and medium-term notes in China also handed out a ban, said the company provided fake information to the regulator and charged borrowers high fees for consulting services, which “seriously violated" its independence as a ratings firm.