(Bloomberg) -- The Securities & Exchange Board of India canceled the license of credit assessor Brickwork Ratings and ordered it to shut down in six months for lapses in its rating process. 

On Thursday, a SEBI order asked Brickworks to also inform its existing clients of closure of operations and barred it from taking on any new mandates. The markets regulator found lapses at Brickwork during inspections, including failure to make proper disclosures, addressing conflicts of interest and not properly maintaining records to support its ratings decisions.

“Governance changes recommended in earlier inspections, and monetary penalties imposed have not proved effective or deterred the Noticee in addressing very basic requirements of running” a credit ratings agency, SEBI wrote in the order.

India’s credit rating agencies have been under scrutiny of regulators since the collapse of Infrastructure Leasing & Financial Services Ltd., or IL&FS, in 2018. Brickwork was one of the seven SEBI-registered credit rating agencies in India.

“This is a first for SEBI, where it proceeded to cancel the certificate of registration owing to repeated lapses,” said Akash Karmakar, partner at law firm Panag and Babu.

The clients of Brickwork will have to undergo a fresh process for credit ratings within 6 months while the instruments already issued should not get impacted, Abhinay Sharma, managing partner at ASL Partners, a legal firm said.

“But all this is subject to further legal recourse which would be taken by Brickwork; it can file an appeal to Securities Appellate Tribunal and depending upon the outcome at SAT, an appeal can then be filed with the Supreme Court,” Sharma added.

(Corrects to say IL&FS collapsed in 2018 in fourth paragraph.)

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