Mumbai / New Delhi: All seven law officers hired on contract since 2007 at market regulator Securities and Exchange Board of India, or Sebi, have quit saying they faced discrimination and low pay.
The seven lawyers on contract at Sebi’s legal department have left before their two-year contracts expired, a former executive director at Sebi said on condition of anonymity.
M.S. Sahoo, a whole-time director of Sebi, however, denied the development, saying that he was not aware of any instance where a set of people left Sebi’s legal department before the end of their term.
At the time of hiring these seven experienced hands, the regulator had also hired 44 fresh law graduates as permanent staff. There are some 80 law officers currently working at Sebi.
The resignations could pose a problem, the former official said. “In order to get market information, it is key to have outsiders come in, in addition to the permanent hires,” he said. “A good percentage of these lawyers are needed to bring different perspectives into the work.”
“The fundamental reason why most of the lateral hires left Sebi was inadequate monetary compensation,” Rohini Roy, who resigned as legal officer at Sebi last year, said. “The organization (also) made a distinction between contract hires and permanent hires. Therefore, we were not eligible for a lot of benefits that was promised to us while hiring.” Roy joined Sebi from PepsiCo India Holdings Pvt. Ltd.
“The real problem is the mindset of the human resources department of Sebi,” said another former legal officer at Sebi on condition of anonymity. “They don’t treat employees on contractual basis on par with the permanent hires. I was entitled to house rent allowance every month but I got the money after a year of joining.”
HR issues? Sebi currently has two legal advisers and three deputy legal advisers in its legal department at its head office in Mumbai. Adeel Halim /Bloomberg
Another former Sebi lawyer, who left to “seek a better career opportunity”, also said there was difference in benefits offered to permanent hires and contractual employees. “The wages for contract hires was lower...this differentiation did not foster team spirit in the legal team. Also, those on contract were not offered cash payments when they decided against taking up accommodation given by Sebi.”
Last week, Sebi announced it would hire two legal advisers on a contractual basis to strengthen its legal team. Its website carried an advertisement on 22 December seeking applications for two deputy legal advisers.
Sahoo said Sebi is hiring more legal staff to clear pending enforcement cases. According to the regulator’s annual report, 3,656 cases were pending for enforcement actions as on 31 March. Sebi currently has two legal advisers and three deputy legal advisers in its legal department that has its head office in Mumbai.
While Sebi has been credited with creating an efficient market infrastructure and maintaining orderly conditions in difficult times, investigation and adjudication have not been its strengths.
In 2008, Sebi filed 250 appeals with the Securities Appellate Tribunal, or SAT. Of them, 73 appeals were dismissed, including at least five high-profile cases.
SAT on 26 September 2008 overruled Sebi’s directive on Sasken Communication Technologies Ltd’s public notice for buy-back of its shares of Rs40 crore. In another case, the SAT on 8 July reversed Sebi’s order asking Heidelberg Cement AG to pay non-compete fees to the minority shareholders of Mysore Cements Ltd.
The tribunal on 29 May waived a Rs25 crore penalty on Swiss cement maker Holcim Ltd that Sebi had imposed for a violation of the country’s takeover code. The penalty was related to Holcim’s acquisition of Everest Industries Ltd.
In yet another case, SAT on 15 May reversed Sebi’s order that imposed a Rs1 crore penalty on Goldman Sachs Investment (Mauritius) Ltd for not submitting information on offshore derivatives instruments in a prescribed format.
Besides losing appeals this year, Sebi has also been hauled up by SAT for legal lapses. There have been many instances where SAT pulled up Sebi on the ground that it did not hear the involved entities in a dispute.
SAT set aside a Sebi order that directed Karvy Stock Broking Ltd on 4 May to pay for alleged inappropriate gains from a so-called initial public offering scam.