‘Misguided by external elements’: SEBI on ‘toxic work culture’ allegations

Responding to the complaints of a "toxic work culture" as alleged by a group of SEBI officials, the market regulator has issued a statement, saying human resource allowance (HRA) issues of staff were "misguided by external elements" to target the credibility of SEBI and its leadership.

"SEBI officers are already well paid, and for entry-level officers at Grade A, the cost to the company is around Rs 34 lakh per annum, which compares extremely favourably even with the corporate sector. The new demands placed by them would amount to an additional CTC of almost Rs 6 lakh per annum," the regulator clarifies.

Stating the letter of August 06, 2024, was not sent by the SEBI employee associations to the government (and a section of the media) but was an "anonymous" one, the regulator says that it was condemned by officers and associations themselves and was communicated to the ministry of human resource via emails.

SEBI says a “group of protesting employees” consciously designed a strategy to change the narrative to frame the issue as relating to the "work environment", and to have “bargaining power” to seek more benefits. Accordingly, a letter focused on “work culture” was crafted and sent to HRD on August 06, 2024, it said.

"It is unfortunate that some elements have attempted to diminish the significant capabilities of SEBI employees by instigating employees to believe that, as “employees of a Regulator” they should not be required to have such high standards of performance and accountability," says SEBI.

On the claims of "unprofessional work culture", as mentioned in the August 6 letter, SEBI says these were misplaced. They seem to stem from the instances like "under-pitching" of the processing capability of officers by as low as 1/4th of actual capacity; misreporting of the status of achievement of KRAs; and shuttling of files between departments over a long period to avoid taking decisions; and “adjusting” appraisal marks of poorly performing officers to “somehow” make them eligible for promotion.

"In such instances, the officers concerned have been held accountable, given firm feedback, and corrective actions taken," says SEBI.

SEBI says employees were demanding a 55% increase in house rent allowance (HRA) over the allowance set in 2023, among numerous other benefits. They also raised an issue on the updation of SEBI’s automated Management Information System for key result areas (KRAs), which had been designed to bring more transparency, fairness and accountability within SEBI. A 15-minute silent protest was also held in this context.

Thereafter, after 7 days, a second letter was submitted, with a long list of 16 demands, including an increase in HRA. Further, automatic promotions at lower performance ratings without interviews have also been “demanded”, SEBI said.

The regulator said that the letter of August 06, 2024, laid great stress on “unreasonable targets”, when, in response to this feedback, the KRAs were reviewed and most of them reaffirmed by three/four levels of management, and only a few departments saw minor changes to KRAs. “Thus, SEBI’s junior officers, who were in large numbers, originally aggrieved in respect of HRA allowances, have been misguided, perhaps by external elements.”

Several reports said on Wednesday that many SEBI officials had complained to the finance ministry in August, alleging a "toxic work culture". These accusations have added to the woes of SEBI Chairperson Madhabi Puri Buch, who has also been accused of a "conflict of interest" by U.S.-based short-seller Hindenburg Research.