China's central bank said on Friday it had imposed fines on six credit rating companies, including the Chinese subsidiary of S&P Global, for violating the rules.
The People's Bank of China (PBOC) issued a warning to S&P, as well as a fine of 2.12 million yuan (US$297,000) for alleged violations including “failing to conduct credit rating work in accordance with legitimate procedures and rules” and “failing to carry out credit rating work In accordance with legitimate procedures and rules.” Sending reports to the credit rating authority or its transmitting agencies,” according to a notice on the People’s Bank of China’s website.
The notice said that a former Standard & Poor's China executive, surnamed Eastham, who was responsible for rating analysis in China, was fined 30,000 yuan.
“Standard & Poor’s (China) Credit Ratings Agency has received notice from the People’s Bank of China,” the agency said in an email response. “We take this matter seriously and have taken action to address the issues identified.”
Other companies targeted in the disciplinary move are Fareast Credit, China Lianhe Credit Rating, CSCI Pengyuan, Shanghai Brilliance Credit Rating & Investors Services and China Chengxin International Credit Rating (CCXI), all domestic companies. They were imposed with larger fines, ranging from 3.9 million yuan to 7.69 million yuan, according to the People's Bank of China.
The alleged violations included “violation of independence requests,” “failure to disclose information as requested or dissemination of false information” and “violation of professional credit rating management requirements.”
The statement said all sanctions were imposed in November and announced on Friday.