By IANS,
Washington : Pressure from the US government over the country’s credit rating downgrade finally seems to have compelled rating agency Standard & Poor’s to let go of Deven Sharma, its Indian origin president, who led the action to review the rating of the world’s largest economy. The firm, however, late Monday said the decision was taken much earlier.
Sharma became the public face of the firm after downgrading long-term US credit rating to AA+ from AAA Aug 5. S&P has since come under pressure from various quarters including an investigation from the Justice Department into its ratings of subprime mortgage securities.
The S&P downgrade led to a rout in stock exchanges world over. Indices at Wall Street fell the sharpest since 2008 even as the credit rating agency said it would consider a further downgrade of US credit if the country’s fiscal position continued to deteriorate. The reverberations of the downgrade are still being felt in financial markets globally.
Sharma, 55, will step down Sep 12, but will remain with the company through the end of the year to help oversee S&P’s parent company McGraw-Hill’s review of its businesses, the company announced late Monday.
Sharma will be replaced by Douglas Peterson, 53, currently the chief operating officer of Citibank.
Following the downgrade, some investors have also been clamouring to break up the parent firm McGraw-Hill. The New York Times citing people briefed on the matter said Sharma had been considering stepping down well before the latest attacks on the company.
He first began pondering his options after McGraw-Hill announced last November that Standard & Poor’s would be split into its two component businesses.
That corporate reorganization left Sharma with less responsibility, leading him to ask about his odds of eventually becoming the company’s chief executive, the Times said.
Sharma has been with the company for just under five years, and became president of Standard & Poor’s almost exactly four years ago just before the global financial crisis unfolded.