Sebi officials protest move to bring in outsiders to fill top vacant slots

Our Markets Bureau

Mumbai, May 22: EVEN as the markets regulator, the Securities and Exchange Board of India (Sebi), is busy in face-saving exercise following the stocks scam early this year, the issue of filling the vacant top slots too is haunting it, leaving the market players and investors groping in the dark.

And Sebi chairman DR Mehta prefers a stony silence on the subject, more so after the setting up of the joint parliamentary committee to probe the antecedents of the stocks scam.

Some five executive directors’ post will fall vacant by August. The list include LK Singhvi (in charge of investigations and surveillance), OP Gehrotra (in charge of primary markets and takeovers), MD Patel (in charge of secondary markets and retired more than a year ago), Ashok Kacker (in charge of mutual funds) and CM Mehra (in charge of administration). Prof JR Varma, architect of the derivatives market in India and main proposer of the ban on badla (also a Sebi board member) has already put in his papers and will leave by mid-June this year. So, within hours of media reports indicating Sebi’s move to rope in officials from the Reserve Bank of India (RBI) to fill around five top slots at the Sebi, the lower rung officials within Sebi have become restless, to the extent that majority of them have opposed the move.

The Sebi’s reported move to fill top positions, from people on deputation from other cadres thus, has come under fire from the existing staff on two main counts.

One, the move lacks transparency and two, it prevents the insiders themselves the benefit of elevation from their current position. As many as 16 existing officers have submitted a letter to the Sebi chairman opposing the reported policy to fill top slots with deputationists.

In their letter, the Sebi officials have alleged that the Sebi’s current staff policy is ad hoc and has, therefore, prevented them from taking advantage of the available opportunities within the organisation. This benefits are taken away by the deputationists, they maintain. When contacted, the Sebi chairman DR Mehta refused to talk on “personnel matters.” However, a senior Sebi officer denied that the finance ministry had decided not to entertain any requests for deputation to Sebi from other departments within the government and that the Sebi had sent a formal letter to Reserve Bank of India (RBI) seeking their staff on deputation.

Sebi has had people on deputation from Indian Administrative Service (IAS) and Indian Revenue Service (IRS). The senior Sebi officers also allege that the administration was always been headed by outsiders (recruited form other cadres), who had little interest in building up the Sebi cadre. They regretted that, even as so many regulations were framed during this period for the securities markets, no service regulations have been formed even after eight years of existence. Another regulator formed only in 2000, Insurance Regulatory Authority of India (Irda), had already notified service regulations. However, Sebi has failed to frame such norms even as the Controller and Auditor General (CAG) has suggested, six year back, the importance of having such rules for benchmarking audit system against such norms.

The officers have claimed that they are professionally qualified and have on-the-job experience of the securities market for the last eight to 12 years, a pool of talent which is not available outside.

While there was substantial delay in promotions for regular cadre of the Sebi, the deputationists were promoted time and again with retrospective effect, without any criteria and even before completion of three years of service in Sebi. Reputed organisations duly advertise for each and every post, whether deputation or permanent and appoint independent recruitment committees, filled with people not connected with the recruiting cadres. Lack of this policy has led to deputationists staying with the Sebi after getting a series of extensions, they said.