The Securities and Exchange Board of India (Sebi) has withdrawn its September 4 statement which alleged that certain ‘external elements’ instigated a section of its employees to complain to the finance ministry about a toxic work culture.

The market regulator said on Monday that employee-related issues will be managed internally in a time-bound manner.

On August 6, over 500 Grade A officers had written a letter to the finance ministry complaining about a “stressful and toxic work environment” where team members were being forced to grapple with “unrealistic targets and changing goalposts” — and publicly humiliated if they couldn’t cope with the workload.

The regulator then came out with a stinging response in which it claimed 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 issue into a toxic work culture issue.

The market watchdog had said that while its officers are well-paid, the claims of unprofessional work culture in the letter to North Block is misplaced and that some elements provoked employees to believe that they should not be required to have such high standards of performance and accountability.

A day after this press release, a large number of employees had staged a protest outside its headquarters demanding that it be taken back. They also sought the resignation of chairperson Madhabi Puri Buch.

In a statement issued on Monday, Sebi said that its employees have played a critical role over the past 36 years in shaping the Indian securities market into one of the most dynamic and well-regulated markets globally.

Sebi added that it addresses employee-related matters through appropriate internal mechanisms.

“Following constructive discussions with representatives of all grades of officers, Sebi and its employees have reaffirmed that such issues are strictly internal and will be managed in accordance with the organisation’s high standards of governance and within a time-bound framework,” the regulator said.

Accordingly, the press release issued on September 4 has been withdrawn.

Further, Sebi said its employees have reiterated their commitment to resolving concerns amicably through established internal channels, ensuring that such matters remain internal and managed within a time-bound framework.

“Employees have strongly condemned the unauthorised release of internal communication and have confirmed that all concerns shall be addressed amicably through established internal channels,” the statement said.

This withdrawal comes at a time chairperson Buch has been targeted by the Congress party which has levelled allegations of conflict of interest and accused her of going slow on the investigations against the Adani group.

Last Saturday, the Opposition party claimed that she traded in listed securities while in possession of unpublished price-sensitive information.

It also alleged that she has been investing in Chinese firms at a time India is facing geopolitical tensions with the neighbouring country.

The August 6 letter of the employees to the finance ministry alleged instances of public humiliation.

The letter had claimed that Sebi had become a ``furnace of unrealistic KRA (key result areas) point achievement.

It also alleged that while “unprofessional language is casually used by people at the highest level’’, ``shouting, scolding and public humiliation have become a norm in meetings’’.

Besides demanding the HRA hike and other benefits, the employees were not happy about the updation of the regulator’s automated Management Information System for KRAs (key result areas) which according to the market regulator was designed to bring more transparency, fairness and accountability in the organisation.