“I have a long list of colleagues and bosses who will testify to the fact that I’m not only a difficult boss to work with but also an impossible subordinate to work with…. Problem-solving with me is like peeling an onion; it makes everyone cry in the process.”

Madhabi Puri-Buch while addressing the IIM Ahmedabad convocation in March this year

Sebi chairperson Madhabi Puri-Buch’s troubles have deepened as a large
number of middle-level employees raised a banner of revolt against the “toxic”
work culture that she and her leadership team have fostered at the market regulator.

In a letter to the finance ministry, 500 Grade-A officers at Sebi have complained about a “stressful and toxic work environment” where team members are being forced to grapple with “unrealistic targets and changing goalposts” — and publicly
humiliated if they can’t cope with the workload.

Late on Wednesday, the market regulator came out with a stinging response to the latest controversy.

Sebi suggested that the junior officers in the organisation — aggrieved by a denial of their demand for a 55 per cent increase in house rent allowance (HRA) — had been persuaded by some “external elements” to conflate the matter into a toxic-work-culture issue.

In its letter, Sebi said that a group of employees had connived to flag it as a work-environment issue “with an objective to have bargaining power to seek more benefits”.

It claimed that they then circulated another letter containing a long list of 16 demands for “numerous monetary and non-monetary benefits, including the increase in the HRA”.

The market regulator claimed that entry-level officers at Grade-A were well paid, with a cost to company (CTC) of ₹34 lakh per annum which, it said, “compares extremely favourably even with the corporate sector”.

The letter added that if the new demands were accepted, it would have led to an additional CTC of “almost ₹6 lakh per annum”.

Controversy snowballs

The employees’ letter to the ministry was written on August 6 — about four days before Puri-Buch was engulfed by a raging controversy after US short-seller Hindenburg Research accused the Sebi chief and her husband of close links with the Adani group arising from investments they had made in a Mauritius offshore fund that was also used by Gautam Adani’s Dubai-based elder brother Vinod Adani to funnel funds into the Indian stock markets.

The contents of the letter signed by a large number of middle-level executives of Sebi said: “At one time, the employees will be called names and at other times they would be shouted at by the leadership with no defence from top management.”

Puri-Buch has a reputation for being a hard taskmaster and Sebi, which has never been headed by someone who earned her spurs in the chaotic world of private investment banking, was being set up for a clash of cultures with an inevitable dose of toxicity.

But Puri-Buch, who is battling a raft of accusations from Hindenburg, serious charges of conflict of interest levelled by the Congress over payments from the ICICI Group as well as Zee founder Subhash Chandra’s allegation that she scuttled the merger of Zee and Sony, could have done without a revolt within her fief.

She has been under a harsh spotlight after Hindenburg alleged on August 10 that Puri-Buch and her husband Dhaval Buch had investments in obscure offshore entities based in Bermuda and Mauritius, which were also used by Vinod to invest in Indian markets and push up stock prices of group firms.

The firm also alleged that from April 2017 to March 2022, while Buch was a whole-time member and Sebi chairperson, she had a 100 per cent interest in offshore Singaporean consulting firm Agora Partners. It also claimed that Puri-Buch had a 99 per cent stake in an Indian consulting business called Agora Advisory, where her husband isa director.

Soon after, the Congress launched its fusillade when it came up with whistleblower documents showing that Puri-Buch had received salary, stock options and other perquisites from the ICICI Group (where she had workedbetween 2007 and 2013) even after being appointed as a whole-time member at Sebi in April 2017.

The Congress said that the money she received from the ICICI Group was five times more than what she got as Sebi chairperson.

There is a buzz of speculation that the Congress intends to come out with a fresh set of disclosures next week against Puri-Buch, fanning a demand for her ouster.

The Sebi chairperson has been ringing in reforms in market regulatory practices and mechanisms but notall of it has gone down well with investors.

Foreign institutional investors have been particularly miffed over how Puri-Buch has pushed for shorter settlement cycles and aims to usher in instant settlement for trades. Foreign portfolio investors (FPIs) have raised concerns about the proposed measures.

“We are also particularly concerned about the timeline for the introduction of these two optional phases, especially Phase 1 Instant Settlement, as they may give rise to unintended systemic risk without the proper systems and operations in place for all market participants,” said Hong Kong-based Asia Securities Industry & Financial Markets Association (ASIFMA).

This resulted in Sebi introducing a beta version of T+0 or same-day settlement on an optional basis.

Recently, the regulator proposed tighter norms for merchant bankers who assist in firms launching an IPO. Among others, Sebi proposed raising their net worth threshold to ₹50 crore from ₹5 crore. Observers said that though it would bring serious players into the market, it could also act as a hurdle for the smaller entities.