Mumbai: Edelweiss Financial Services has filed a $ 100 million (Rs 750 crore) defamation suit against global rating agency Moody’s Corporation at the Bombay High Court for misreporting its numbers in one of the rating firm’s investor reports. Edelweiss has also demanded another 100 crore for exemplary damages.
On May 18, Moody’s published a report titled ‘Economic Slowdown Worsened by Coronavirus will Exacerbate Liquidity Stress’ in which it has compared the asset quality and liquidity of various non-banking financial companies (NBFCs).
In the report, it was mentioned that the cash and cash equivalents as a percentage of total assets of Edelweiss was zero and the firm has the least balance in liquid assets compared to other NBFCs.
According to Edelweiss, the company’s liquidity position was 17 per cent of total assets as on September 30, 2019, and 22 per cent as on December 31, 2019 — way ahead of all the others mentioned in the report.
Edelweiss has alleged that Moody’s put out a wrong report with malicious intent to damage the group and create panic among shareholders. It added that the report was published by several media houses damaging its brand and impacting its share price.
Edelweiss also said that Moody’s later changed the balance sheet liquidity number to 12 per centfrom zero as of September 2019, which was still wrong.
The case came up for hearing on Monday and Justice KR Sriram posted it for further hearing on July 23.
When contacted, a Moody’s spokesperson said: “We believe the allegations are without merit. We wouldn’t comment any further as the matter is before the court.”
An Edelweiss spokesperson declined to comment.