Sebi blames ‘external forces’ for fuelling discontent among its employees, says they are well paid but misguided

A bird flies past the logo of the Securities and Exchange Board of India (SEBI) at its headquarters in Mumbai on April 19, 2023. | Photo credit: Reuters

The Securities and Exchange Board of India (Sebi) has blamed “external elements” for misleading its employees, particularly junior officials, on house rent allowance (HRA) issues, targeting its credibility and “leadership”.

SEBI on Wednesday (September 4, 2024) said, “We believe that the junior officials of SEBI, who were in large numbers, originally aggrieved with regard to HRA allowance, have been misled, perhaps by external elements to believe that as “employees of a regulator”, they should not be held to high standards of performance and accountability, even though they have in fact demonstrated that they are fully capable of holding the market ecosystem to high standards.”

It said they were also misled into believing that they were being underpaid even at a CTC of Rs 34 lakh per annum and that it would be in their interest to “use work culture issues to bargain for monetary gains and believe that they should get automatic promotions”.

It declined to name the “external forces”, saying “we would not like to speculate as to who those external elements might be or what their objectives might be”.

Reaction to media report

On Sebi’s work culture, the market regulator issued a five-page statement saying employees had been demanding a 55% hike in HRA over fixed allowances in 2023 apart from several other benefits in recent times.

“Employees also raised issue with the update of Automated Management Information System for SEBI’s Key Result Areas (KRAs), which was designed to bring in greater transparency, fairness and accountability within SEBI. A 15-minute silent protest was observed in this context,” SEBI said.

It said a group of employees deliberately devised a strategy to change the narrative to make the issue related to the work environment, with the aim to “gain bargaining power to obtain greater benefits”.

It added, “Accordingly, a letter focused on “work culture” was prepared and sent to the Ministry of Human Resource Development on August 06, 2024. Subsequently, after 7 days, apparently as part of the strategy, a second letter was submitted with a long list of 16 demands for several monetary and non-monetary benefits including increase in HRA.”

In addition, automatic promotions were demanded based on low performance ratings without interview.

The regulator said Sebi officers are already getting good salaries and for Grade A entry-level officers, the cost-to-company (CTC) is Rs 34 lakh per annum which is at par with private sector salaries. On this, employees have started demanding additional CTC of about Rs 6 lakh per annum.

“The claims of unprofessional work culture in the letter dated August 06, 2024 are incorrect and appear to stem from instances such as underestimating the processing capacity of officers by even 1/4th.^th of true potential,” it said.

Besides, incorrect reporting of status of KRA achievements, shuffling of files between departments for long periods to avoid decision making and adjusting evaluation marks of poorly performing officers to somehow make them eligible for promotion, it said.

In such cases, the concerned officials have been held accountable, given concrete feedback and corrective action has been taken.

“It is unfortunate that certain elements have attempted to undermine the critical capabilities of SEBI employees, misleading the employees into believing that, as “employees of a regulator”, such high standards of performance and accountability are not expected of them,” SEBI stressed.

“SEBI fears that junior officials are receiving messages from elements outside their group, which are effectively inciting them to go to the media, to go to the Ministry, to go to the Board…, perhaps to serve their own purpose,” it said.

“In fact, the letter dated August 06, 2024 was not sent by SEBI employee unions to the government (and a section of the media). It was an anonymous email that was sent, and the officers and unions themselves have condemned it and informed the Ministry of HRD about it through email,” it claimed, adding that most of the unions have given in writing that they have not pursued the matter beyond the official channel.