The protestors have also called for the resignation of Sebi Chairperson Madhabi Puri Buch, who has been under scrutiny in recent months. Allegations surrounding her management style, conflict of interest, and financial misconduct have cast a shadow over her leadership. The note, viewed as an attempt to shield internal failures by attributing them to outside factors, has only fueled growing dissatisfaction within Sebi’s ranks.
The internal note, which surfaced earlier this week, sought to explain a series of operational delays and procedural shortcomings, attributing them to influences outside of Sebi’s control. However, many employees found the message to be dismissive of genuine internal grievances. The protest marked the first visible sign of revolt under Buch's tenure, which began in February 2022. Employees have raised concerns about a deteriorating work environment, alleging an increasingly hostile and toxic culture under her leadership.
Sebi has yet to issue a formal response to the protest. However, insiders within the organization suggest that tensions have been simmering for months, with staff grievances ranging from accusations of favoritism to a lack of transparency in decision-making. The protestors, many of whom are mid-level officers, argue that the memo reflects a broader failure by the leadership to address the core problems afflicting the regulatory body.
Madhabi Puri Buch, who made history as the first woman to chair Sebi, is credited with several reforms aimed at improving market transparency and investor protection. Despite her track record of introducing sweeping changes, Buch’s leadership has been criticized for fostering a hierarchical and rigid work culture. Employees have voiced concerns over a perceived culture of micromanagement, as well as instances of intimidation by senior officials.
A central point of contention in the unfolding drama revolves around allegations of conflict of interest involving Buch and her previous affiliations with private sector entities. While there is no concrete evidence that directly implicates her, the perception of potential conflicts has led to unease among employees. Critics argue that Buch’s connections with certain financial institutions could potentially influence regulatory decisions, undermining the independence of Sebi.
Further compounding the situation are accusations of financial irregularities tied to contracts issued under Buch’s leadership. These claims, while still unverified, have added fuel to the fire, with employees demanding greater accountability and transparency. The call for her resignation, though not widespread, reflects growing dissatisfaction within Sebi over the current leadership’s handling of internal affairs.
Beyond the internal strife, Sebi is also facing external pressures from both the financial industry and the government. Market participants have expressed frustration with what they describe as a slower regulatory response to evolving market conditions. Sebi’s decision-making processes, particularly around approvals for new financial products and services, have come under fire for being sluggish and overly bureaucratic. This has led to delays in market innovations and has created friction between Sebi and industry stakeholders.
Government officials, while publicly supportive of Sebi’s regulatory role, are privately concerned about the mounting discontent within the organization. There is growing speculation that the Ministry of Finance may intervene to mediate the ongoing conflict, though it remains unclear whether this will involve any leadership changes. Some officials within the government are wary of any perceived instability within Sebi, given the critical role the regulator plays in maintaining market confidence.
Sebi’s leadership has not publicly addressed the specific allegations of a toxic workplace or the demands for Buch’s resignation. However, sources close to the leadership have indicated that the chairperson is likely to issue a statement in the coming days to calm the waters. Whether this will be enough to appease discontented employees remains to be seen.
The silent protest comes at a time when Sebi is under intense scrutiny for its role in regulating the country’s fast-evolving capital markets. In recent months, Sebi has been instrumental in introducing regulations to tackle insider trading, strengthen corporate governance, and enhance transparency in initial public offerings (IPOs). Despite these efforts, criticism over its internal functioning threatens to overshadow the progress made on regulatory fronts.
Industry analysts have noted that the unfolding crisis could have far-reaching implications for Sebi’s credibility as an independent regulatory body. Any perception of internal discord or conflict of interest could erode investor confidence, particularly at a time when India’s financial markets are becoming more integrated with global markets. The situation also raises questions about the broader governance structure of regulatory bodies, especially when leadership positions are held by individuals with prior industry affiliations.