McGraw Hill has named Deven Sharma president of its tainted financial services division Standard & Poor’s effective immediately.

Sharma replaces Kathleen Corbet, who left to “pursue other opportunities”.

Sharma was previously executive vice president at Standard & Poor’s with responsibility for Investment Services and Global Sales and before that a partner at management consulting firm Booz·Allen & Hamilton.

Deven Sharma

The 51-year-old executive, who has been with McGraw Hill since 2002, will have to work hard to repair the tattered reputation of Standard & Poor’s.

Credit rating agencies such as Standard & Poor’s, Moody’s and Fitch have come under a cloud and are facing strident criticism for failing to adequately discharge their responsibilities in correctly assessing mortgage-backed securities tied to sub-prime loans.

As a recent front-page story in the Wall Street Journal (subscription required) put it:

[C]redit-rating firms also played a role in the subprime-mortgage boom that is now troubling financial markets. S&P, Moody’s Investors Service and Fitch Ratings gave top ratings to many securities built on the questionable loans, making the securities seem as safe as a Treasury bond.

Standard & Poor’s and other rating agencies were bullish on mortgage backed securities and its offspring collateralized debt obligations for far too long than warranted. They also earned significant fees by rating these securities.

Only after the shit hit the fan in the U.S. initially and then rippled across to other markets globally, did the rating agencies downgrade several mortgage-backed securities tied to subprime loans.

It was after the mortgage-backed securities tied to subprime loans issue ballooned into a crisis that Standard & Poor’s and Moody’s downgraded several hundred securities in July.

Sharma holds a bachelor’s degree from Birla Institute of Technology in India, a master’s degree from the University of Wisconsin and a doctoral degree in business management from Ohio State University.

India is a critical market for Standard & Poor’s and accounts for over a third of its global head count.

Deven Sharma is on the board of CRISIL, a leading Indian provider of credit ratings, financial news and risk and policy advisory services whose majority shareholder is Standard & Poor’s.

  Deven Sharma