Unprofessional work culture claims misplaced, says Sebi

Capital market regulator Securities and Exchange Board of India (SEBI) denied on Wednesday the claims of an unprofessional work culture made by some of its employees. Reports had surfaced suggesting that around half of its 1,000 senior officers flagged a toxic work culture to the finance ministry in August. SEBI stated that, in all such instances, the concerned officers were held accountable, given firm feedback, and corrective actions were taken.

In a five-page statement issued late Wednesday, SEBI described these claims as "misplaced" and attributed them to issues such as:

• "Under-pitching" of the processing capability of officers by as much as one-quarter of the actual capacity 
• Misreporting of the status of Key Result Area (KRA) achievements 
• Shuttling of files between departments over extended periods to avoid making decisions 
• Adjusting appraisal marks of poorly performing officers to make them eligible for promotion 

"It is unfortunate that some elements have attempted to diminish the significant capabilities of SEBI employees by instigating them to believe that, as 'employees of a Regulator,' they should not be held to high standards of performance and accountability," SEBI wrote. The regulator added that it remains committed to being "responsive to the market ecosystem and all its participants, both in terms of approval speed and facilitating ease of doing business, as well as in carrying out timely investigations and enforcement against wrongdoing in the market".

SEBI also highlighted that its staff has been delivering results over many decades. With the increasing complexity and scale of the market, SEBI has adopted technology and new processes to continue to serve the market effectively. The regulator listed several initiatives undertaken in the past 2-3 years in line with this commitment:

• Setting quantified KRAs at the start of the year 
• Establishing officer-level and team-level monthly targets for work completion 
• Implementing sharp accountability for aging and pendency from the date of first receipt of applications or references, rather than the date of the last communication 
• Providing monthly Management Information Systems (MIS) reports for early identification of problem areas and timely resolution of bottlenecks 
• Conducting end-of-year performance reviews by a panel of Whole Time Members and the Chairperson to facilitate reward and recognition for high-performing teams and appropriate actions for low-performing teams.
• Adapting the promotion policy to include the suitability of candidates for SEBI’s core functions in addition to seniority and past performance 
• Requiring mandatory certifications for employees in line with those required for market participants 
• Implementing quantified output-based staffing based on KRAs and transparent rules for creating vacancies for promotion 
• Adopting technology to improve productivity across the organisation 
• Over the past 2-3 years, SEBI employees have embraced these new initiatives
• The aging of pending matters across every department has shown significant improvement, and the market has experienced SEBI’s responsiveness and timeliness in its actions 

In their letter to the finance ministry dated August 6, the employees alleged that meetings at the institution often involved "shouting, scolding, and public humiliation," with leadership under SEBI Chairperson Madhabi Puri Buch allegedly using "harsh and unprofessional language" with team members. These reports emerged amid allegations of serious misconduct by SEBI Chairperson Madhabi Puri Buch, including claims of conflict of interest by US-based short-seller Hindenburg Research on August 10, which triggered concerns about the regulator’s credibility and calls for her removal. Buch and her husband Dhaval Buch have categorically denied the charges, describing them as attempts at "character assassination."

The August 10 Hindenburg report accused Buch and her husband of previously investing in offshore funds used by the Adani Group, among other serious allegations.

Many financial experts, including foreign investors, have questioned SEBI's credibility under her leadership. In an interaction with Zee Business last month, former Finance Secretary SC Garg suggested that Buch should step down, as recent events are "not good for the reputation" of the country's market regulator. He also recommended that the government investigate the matter closely.