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 “misguiding” its staff, more specifically junior officers in House Rent Allowance (HRA) issues, to target its credibility and “its leadership”.

“It is our belief that SEBI’s junior officers, who were in large numbers, originally aggrieved in respect of HRA allowances, have been misguided, 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 delivering to high standards to the market ecosystem,” SEBI said on Wednesday (September 4, 2024).

They have been misguided also to believe that they were being underpaid even at a CTC of ₹34 lakh per annum and that it would be in their interest to “use issues of work culture to bargain for monetary benefits and to believe that they should get automatic promotions”, it said.

It opted not to name the “external forces” by saying “we would not like to speculate on who those external elements may be or what their motives might be”.

Responding to media report

On SEBI’s work culture, the market regulator released a five-page statement stating that the employees, in recent past, were demanding 55% increase in HRA over the allowances set in 2023 among numerous other benefits.

“Employees also raised an issue on 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 held in this context,” SEBI said.

It said a group of employees consciously designed 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”.

“Accordingly, a letter focused on “work culture” was crafted and sent to HRD on August 06, 2024. Thereafter, after 7 days, apparently as part of the strategy, a second letter was submitted with a long list of 16 demands, for numerous monetary and non-monetary benefits including increase in HRA,” it added.

Further, automatic promotions at lower performance ratings without interviews was demanded, it further said.

Stating that SEBI officers were already well paid and for entry-level officers at Grade A, the cost-to-company (CTC) is ₹34 lakh a year that is comparable to private sector salaries, the regulator said the staff started demanding an additional CTC of almost ₹6 lakh per annum.

“The claims of unprofessional work culture in the letter dated August 06, 2024 are misplaced and seem to stem from instances such as under-pitching of processing capability of officers by as low as 1/4^th of actual capacity,” it said.

Also, misreporting of status of achievements of KRAs, 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, it said.

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

“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,” SEBI stressed.

“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,” it said.

“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). It was an anonymous email that was sent, and officers and associations have themselves condemned it and communicated the same to HRD through emails,” it claimed adding most unions have given in writing that they had not escalated the matter beyond the official channel.