(Yicai Global) Aug. 20 -- China's securities regulator has suspended Dagong Global, a Chinese credit ratings agency that prides itself on being a national brand, from issuing new bond ratings for a year after it broke the principle of independence by offering issuers both consulting and rating services.
The Beijing-based firm's management is in disorder, the China Securities Regulatory Commission said on Aug. 17. Dagong also furnished false information in materials submitted to the regulator, it added, saying the company cannot be considered independent after offering paid services to the bond issuers it evaluates.
The self-regulated National Association of Financial Market Institutional Investors also weighed in on the matter, with its findings mostly in line with the CSRC.
Dagong was the first ratings institution in China and is entitled to evaluate all debt instruments in the country, aside from sovereign bonds. It was also the first Chinese company to offer state credit risk data to users around the globe and represented the nation as it looked to reform the international credit rating system. In January this year, it lowered its outlook on the United States' sovereign debt in all currencies from A- to BBB+, but has been much more generous with ratings at home.
"Dagong Global will adhere to its internationalized path as a national brand, and stick to the ratings principles of impersonality, fairness and independence," the firm said in a statement, adding that it will "advance innovation in ratings models based on national development brands and actively engage in the reform of the international rating system."
It also said it would rectify issues and threatened to sue anybody who slandered the company in reference to the suspension.
Editor: James Boynton