Standard & Poor's President Deven Sharma
Standard & Poor's President Deven Sharma speaks during an interview at the International Economic Forum of the Americas in Montreal, Quebec in 2010. Sharma is being replaced as president at S&P following controversy over the agency's U.S. debt rating downgrade made two weeks ago. REUTERS

The chief of Standard & Poor's will step down soon, to be replaced by a senior Citibank executive, in a move announced a few weeks after the credit rating agency downgraded U.S. government debt and sparked a row with Washington.

S&P's parent, McGraw-Hill Companies Inc, said Tuesday that Deven Sharma, who has served as S&P president since 2007, would step down Sept. 12, to be succeeded by Citibank chief operating officer Douglas Peterson.

"S&P will continue to produce ratings that are comparable, forward-looking and transparent," McGraw-Hill said in a statement, adding that Sharma would work on a strategic portfolio review for the group until leaving at year's end.

The U.S. downgrade on Aug. 5 helped lead to the biggest sell-off in share markets since the global financial crisis three years earlier and sparked a row with the U.S. Treasury over some of the agency's calculations in arriving at the new rating.

The U.S. Justice Department is also investigating the ratings agency over its actions on mortgages leading up to the 2008-2009 crisis, a source familiar with the matter told Reuters last week.

But the Financial Times, which first reported the news of Sharma's resignation, quoted unnamed sources Tuesday as saying his departure was unrelated to the downgrade or the Justice Department investigation.

The board of McGraw-Hill Companies made the decision to replace Sharma at a meeting Monday where it also discussed its current strategic review, the Financial Times said.

McGraw-Hill directors and executives met Monday with Jana Partners LLC, a hedge fund, and the Ontario Teacher's Pension Fund to hear their arguments that the company should be broken up.

(Reporting by Abhishek Takle in Bangalore and Wayne Cole and Mark Bendeich in Sydney; Editing by Ed Davies)