The Securities and Exchange Board of India (SEBI) has replied to allegations of a “toxic” leadership culture fostered by the top hierarchy of the regulator. In a 5-page rebuttal to a leaked letter by SEBI employees to the Finance Ministry, the capital and commodity markets regulator hinted at its staff being “misguided by external elements to target credibility of SEBI and its leadership”.
In its rebuttal, SEBI claimed that the letters by its disgruntled employees were “part of a strategy to change the narrative to frame the issue as relating to the work environment, with an objective to have bargaining power to seek more benefits”.
Rubbishing claims that its employees were underpaid, the SEBI reply says that the entry-level salary for its Grade A officers is Rs 34 lakh per annum and the new demands placed by employees would amount to an additional CTC of almost Rs 6 lakh per annum.
“Further, automatic promotions at lower performance ratings without interviews has also been demanded by a section of its employees”, the regulator added.
SEBI emphasised that several initiatives have been taken by it over the last 2-3 years to ensure its employees were technologically updated and the claims of an unprofessional work culture stemmed from various instances such as under-pitching of processing capabilities of officers, mis-reporting of KRA achievements, shuttling of files between departments to avoid taking decisions and ‘adjusting’ appraisal marks of poorly performing officers to ‘somehow’ make them eligible for promotion.
However, the big counter-attack by SEBI is its claim that “junior officers have been receiving messages from external elements outside their group, effectively instigating them to… go to media, go to the Ministry, go to Board…, perhaps to serve their own purpose”. SEBI says “the letter of August 06, 2024 was not sent by the SEBI employee associations to the Government and a section of the media. It was an anonymous email that was sent, and officers and associations have themselves condemned it and communicated the same to HRD through emails”.
SEBI, however, added “we would not like to speculate on who those external elements may be or what their motives might be”.
As part of its reply, SEBI has cites statements from its two employee unions – SEBI Employee Association (SEA) and the SEBI Employee Association for Legal Stream (SEALS) as well as from its Grade A/B/C officers to back up its own allegations and rebuttal.
The SEBI statement is triggered by a letter written by a section of its employees to the Finance Ministry on Aug 6 which levelled several serious charges against the SEBI hierarchy. Without naming SEBI Chairperson Madhabi Puri Buch, the letter said the SEBI office had become a “furnace of unrealistic KRA point achievement.”
Business Today has gained access to this document which cited “unrealistic KRA targets” as one of the two root causes of discontent, claiming the “KRA targets for this year were increased anywhere around 30%-50% for some departments and divisions.” The employees claimed that the “unrealistic” targets have not only hurt the quality of work but also created stress and anxiety leading to “panic addition” instead of “value addition”.
The other root cause, according to the letter written to the Finance Ministry was the “mistrust and lack of respect shown at the highest level towards employees”. Employees claimed that “over the last two-three years fear has become the primary driving force in SEBI”. The letter says that shouting, scolding and public humiliation were the norm in meetings.
The letter also accused the hierarchy of showing its mistrust towards employees by installing ‘swing barriers’ to monitor intra-day attendance. The document went on to describe the work atmosphere as “oppressive”.
“In recent times there has been a tectonic shift in the approach of the management in the way it handles its employees and behaves with them”, the letter further claims.
The explosive allegations end with a slice of poetry: “Baat hasraton ki nahi, baat izzat ki hai, Baat kaam ki nahi, par karane ke tareeqe ki hai, Humne nahi chahaa tha ke baat iss mod pe aaye, Par ab baat humse hamara SEBI cheen lene ki hai”. (It’s not about desires, it is about honour. The issue is not about work, it is about the way we work. We did not want the situation to come to this pass, but now our SEBI is being snatched from us)
The stark divisions within the capital and commodities markets regulator has only added another angle to the flak its chief Madhabi Puri Buch is taking from all sides. The 58-year old former banker has faced a litany of allegations in the past month.
In a report on Aug 10, Hindenburg Research accused her of conflict of interest in SEBI’s probe against the Adani Group. This was followed by the Congress party alleging that Buch drew a salary and got ESOPs from ICICI Bank and its group companies even after taking on her responsibilities at SEBI. Subhash Chandra, the Zee group founder has also accused her of “corruption” and preventing the Zee-Sony merger from taking shape.
