Under pressure, SEBI withdraws press note, aims to rebuild employee trust

SEBI has withdrawn a controversial press release issued earlier this month that alleged its employees were “misguided by external elements” regarding issues related to house rent allowance (HRA).

The withdrawal follows growing unrest among SEBI employees, particularly junior officers, who have been agitating over concerns of a “toxic work culture“ within the organisation.

In just the past two months, SEBI chairperson Madhabi Puri Buch has faced multiple controversies. She has been accused of a conflict of interest related to the regulator’s investigation into the Adani Group.

Additionally, there have been allegations from politicians that she received salaries from companies while holding the SEBI chief position. Furthermore, SEBI employees have voiced complaints about a toxic work environment under her leadership.

On Monday, SEBI formally retracted the press release (No. 20/2024), originally issued on 5 September 2024, with the regulator acknowledging that the earlier statement would no longer stand.

In its latest release issued on 16 September, SEBI emphasised the importance of its workforce, stating that its employees have been instrumental in building India’s securities market into one of the most well-regulated and dynamic globally.

The controversy stems from media reports in August, which suggested that nearly 500 Grade A SEBI official had raised concerns with the government about workplace issues, including public humiliation and a hostile work environment.

The initial press release by SEBI had dismissed these claims, stating that the junior officers had been “misguided, perhaps by external elements.”

In response, SEBI employees staged protests outside the regulator’s headquarters on 6 September demanding the withdrawal of the press release.

They also called for the resignation of SEBI chairperson Madhabi Puri Buch, accusing her of undermining employees through the public statement.

Following discussions with representatives from all levels of SEBI’s workforce, the regulator stated in its September 16 release that employee-related matters will be resolved through internal mechanisms that align with SEBI’s governance standards.

SEBI reiterated that its internal processes are designed to address grievances fairly and time-bound.

The regulator also noted that employees have condemned the unauthorised disclosure of internal communications and expressed a commitment to resolving concerns amicably through established channels.

The incident has cast a spotlight on workplace dynamics within SEBI, even as the regulator navigates growing internal dissent while maintaining its leadership in overseeing India’s capital markets.