SEBI takes a U-turn on ‘staff misguided by external elements’ statement

India’s market regulator Securities and Exchange Board of India (SEBI) on Monday withdrew a contentious press statement issued earlier this month where it said that protesting employees were "misguided by external elements” to target the credibility of SEBI and its leadership.

SEBI employees had staged a protest against chairperson Madhabi Puri Buch on “toxic work culture” at the regulator’s headquarters in Mumbai.

In its earlier press release, SEBI said that its employees were demanding a 55% increase in house rent allowance (HRA) over the allowance set in 2023, among numerous other benefits. "SEBI officers are already well paid, and for entry-level officers at Grade A, the cost to the company is around ₹34 lakh per annum, which compares extremely favourably even with the corporate sector," it said, adding that the new demands placed by the protesting employees would amount to an additional CTC of almost ₹6 lakh annually.

In a fresh statement, SEBI says that its employees have played a critical role over the past thirty-six years in shaping the Indian securities market into one of the most dynamic and well-regulated markets globally.

“SEBI addresses employee-related matters through appropriate internal mechanisms. Following constructive discussions with representatives of all grades of officers, SEBI and its employees have reaffirmed that such issues are strictly internal and will be managed in accordance with the organisation’s high standards of governance and within a time-bound framework,” the statement says.

“Accordingly, the Press Release no. 20/2024 dated September 04, 2024, stands withdrawn. Employees have strongly condemned the unauthorised release of internal communication and have confirmed that all concerns shall be addressed amicably through established internal channels,” says the release.

This comes when the Congress party has accused the SEBI chairperson of “conflict of interest”. When Buch became wholetime member of SEBI, she rented her house to Wockhardt which paid ₹46 lakh rent last fiscal, alleged Congress leader Pawan Khera.

Congress' media and publicity department chairman Khera alleged that between 2018 and 2024, Buch, first as SEBI’s whole-time member and later as its chairperson, received ₹2.16 crore from Carol Info Services Ltd, a part of Wockhardt. “Wockhardt is the same company whose complaints are being continuously dealt with by SEBI. This is completely a case of corruption,” alleged Khera. “Is it right that you rent your property to a company whose cases you are handling? Is this ethically and legally correct?” Khera alleged, asking whether Buch declared this information to the regulator.

The Congress party has also alleged that the SEBI chairperson drew a regular salary from ICICI Bank, despite being a full-time member of market regulator. The party demanded that Buch should step down for alleged violation of section 54 of SEBI Act. Alleging irregularities, Khera alleged that SEBI chairperson Buch has been drawing regular salary between 2017 and 2024 worth ₹16.80 crore from ICICI Bank. The lender, however, clarified that it has not paid any salary to Buch. “ICICI Bank or its group companies have not paid any salary or granted any ESOPs to Madhabi Puri Buch after her retirement, other than her retiral benefits. It may be noted that she had opted for superannuation with effect from October 31, 2013," ICICI Bank said.