Mumbai: The Securities and Exchange Board of India’s (Sebi) decision to hire a chief economist at the level of executive director (ED) has met with opposition from Sebi’s Employees’ Association (SEA).
In a letter addressed to Sebi chairman Ajay Tyagi, the employees said on Monday that the post was redundant as the Department of Economic Policy Analysis (DEPA) at Sebi “appears to have insufficient work". They added that the post of chief economist was justified for the Reserve Bank of India (RBI) as its core function is enabling macro-economic stability as against Sebi’s whose core function is investor protection.
The Sebi board met on 18 September and one of the items on the agenda was to hire a chief economist. The press release issued by the regulator on Monday did not elaborate on whether the board has ratified the decision to hire an economic advisor.
An email sent to Sebi was not immediately answered.
Sebi has two CGMs (chief general managers) in DEPA. “And out of the two one has been assigned to head the integrated surveillance department instead of being assigned research related work," the letter said, a copy of which has been reviewed by Mint.
“Even the DGMs (deputy general managers) have been given other responsibilities," said the SEA letter.
The letter also pointed out that in the past the regulator had sought economists from RBI, but the practice was discontinued as it was felt that it did not serve Sebi’s core functions.
“Unlike RBI, Sebi functioning is not directly related to ensuring major-economic stability, macro monetary policy or fiscal policy," said the SEA.
The 600-odd officers of Sebi also pointed out that hiring at the level of ED was in violation of the amended Sebi employee regulations.
In a board meeting on 26 April, the market regulator had decided that two-thirds of the nine ED posts will be reserved for internal candidates and one-third for external candidates. Earlier, half the appointments at the level of EDs were reserved for external candidates.
The SEA also objected to interviews slated for 12 October to fill up the post of ED, which had been vacated after J. Ranganayakulu’s tenure got over earlier this year.
The letter cited the example of Tata Group and Infosys Ltd, and the struggles they went through after hiring from outside.
“Today Tata Group and Infosys two of the most respected corporates in India are struggling with the aftermath of hiring outside persons at top, leading to issues with governance and cultural clash. Both corporates have since chosen to go for insiders to head the organisations," the letter said.