LOLC pulls out of Fitch rating contract
View(s):The LOLC Group has pulled out of a Fitch Rating contract, after an 8-month dispute, with the latter saying on Friday that it has withdrawn its rating assessment. LOLC had said earlier it won’t withdraw from the Fitch contract.
“Fitch has withdrawn the ratings as the LOLC group of companies has chosen to stop participating in the rating process. Therefore, Fitch will no longer have sufficient information to maintain these ratings,” Fitch said in a statement.
Fitch said at the same time it maintained LOLC’s National Long-Term Rating at ‘BBB+(lka)’/Negative Outlook.
When the last (negative) ratings was issued on LOLC in late April, the latter objected to the rating but said it won’t pull out just like Hayleys which pulled out in protest. Both Hayleys and LOLC disputed the downgrade of their respective ratings and made public statements of disapproval.
Rating industry officials say that ratings for the corporate sector are purely voluntary and contracts with clients clearly have guidelines which explain that positive or negative ratings are released to the public. Ratings of the two companies are purely voluntary and not compulsory, unlike in the case of banks and finance companies.
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