Capital markets regulator Securities and Exchange Board of India (SEBI) on Monday withdrew its press release issued in September 4, which addressed claims of unprofessional work culture, stating that these concerns are “misplaced” and reaffirmed that employee-related issues will be managed internally.
Earlier, On 5 September, around 400 employees of the Sebi had protested silently at the organisation’s headquarters in Mumbai. The employees were protesting the Sebi’s clarification that their earlier letter to the finance ministry on unprofessional work culture is ‘misguided by external elements’. Earlier, Sebi had said that the allegations of toxic work culture in Sebi is misguided by external elements.
“The claims of unprofessional work culture in the letter dated August 6, 2024, are misplaced,” Sebi had said in a statement.
The regulator suspects that junior officers have been receiving messages from outside parties encouraging them to “go to the media, the Ministry, or the Board,” possibly for the outsiders’ own agendas.
“Sebi apprehends that the 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. In fact, the letter of August 06, 2024, was not sent by the Sebi employee associations to the Government (and a section of the media),” the statement noted.
In response, the protesting employees shared an internal message where they said their protest is for the purpose of showing dissent and unity against the arm-twisting exercise done by the top management in the garb of a press release. The immediate demand is withdrawal of press release and resigning of SEBI chairperson for spreading lies against SEBI’s employees.
This is the first time in the history of Sebi employees are holding a protest and seek the resignation of the top boss. It also shows how serious is the issue the employees are raising. In the letter sent to finance ministry, the employees had alleged that there was “immense pressure” at the office, amounting to a “stressful and toxic work environment”.
Employees had raises issues like mistrust and lack of trust shown at work, name callings and scolding/ public humiliation in meetings. Even officers at the highest levels. In a letter, titled ‘Grievances of SEBI officers-A Call for Respect’, the employees complained about “harsh and unprofessional language used by top management for the members.”
“Sometimes it is the point wise KRA systems with unrealistic targets with changing goalposts, the other time it’s the monitoring of minute-by-minute movement of SEBI employees.”
Regulator facing scrutiny
Sebi employee protests are happening at a time when the regulator is already in the headlines for all the wrong reasons– a range of allegations raised against its chief Madhabi Puri Buch by US short-seller Hindenburg and charges against Buch on the grounds of conflict of interest.
The Congress party’s accusations that Buch drew income from previous employers while working as Sebi chairperson is a major allegation against the regulator. Toxic work culture is not accepted not only at a regulatory organisation but in any organization.
It is even more important when such charges arise at a regulatory institution. Sebi is the guardian of Indian investors in the securities market. It cannot operate in the shadow of accusations and mistrust. It is extremely important for Sebi to clean up its house and restore confidence among its own employees and investors.