Anger and resentment among senior executives at SEBI, post FMC merger
After the happy smiles and beating the gong to merge two regulators, comes the real impact at the people level: anger, resentment and objections by SEBI's employee association
The real problem in the merger of Securities and Exchange Board of India (SEBI) and Forward Markets Commission (FMC) is one of accommodating lateral appointments in SEBI at senior levels.
Recruitment in SEBI usually happens at the entry level and there are lateral inductions as well, usually on deputation from other services, under a procedure laid down by the SEBI Employee Service Regulations. Over the past two decades, SEBI’s powers and terms of employment has made it an extremely attractive destination for those on deputation, especially since there is the hope of extending their service by qualifying to become a Whole Time Member (WTM) of the SEBI board. Another rarely discussed attraction is that SEBI now enjoys humungous power with almost no accountability or supervision because less than half a dozen Members of Parliament (MPs) either understand or care about capital market issues. 
The big grouse today is the process followed by SEBI for absorbing FMC employees. We learn that there are three writ petitions have been admitted in Bombay High Court by different sections of FMC employees against, what they allege, is an unfair selection process. SEBI had appointed a Selection Committee to shortlist the FMC employees to be taken by it, and the decision of this Committee had been communicated by SEBI to the government. 
The government notification of 22 September 2015 says that appointments of FMC employees at SEBI would be upon the same terms and conditions of service, as they would have held under the FMC, had it not been transferred and vested with SEBI.
Now SEBI had selected 15 permanent FMC staff out of total 41 employees and seven persons who were on deputation at the commodities regulator. After the government notification, the 15 permanent employees of FMC have been deputed to SEBI for a period of two years. The seven who were on deputation have been told that they can join SEBI for a maximum of six months.  
Now here is where the problem begins. Of these seven employees, SK Mohanty, Director at FMC, has been appointed as Executive Director (ED) in SEBI. VC Chaturvedi, a Director in FMC has been appointed as a General Manager and Vishal Nair, a Joint Director at FMC has been appointed as Deputy General Manager (DGM). Others are appointed as Manager and Assistant General Manager (AGM). One Nagendra Parakh, who was a whole time member at the FMC, suddenly finds himself demoted to the level of DGM at SEBI — what is shocking is that he has been a long time SEBI executive with long experience during the development phase of the market regulator. 
Among those who have gone to court include, Atul Verma, a director at FMC, who had earlier applied for the post of ED and is allegedly aggrieved by the elevation of Mr Mohanty. 
SEBI officials are equally upset, since they see their promotion avenues affected. The SEBI Employees Association has asked that the market watchdog’s employees must be protected in the merger process, especially when taking persons on deputation.  The Association has also raised the issue of appointing an Executive Director. At present, there are seven EDs in SEBI of whom, four are permanent SEBI staff, one is on contract and two are on deputation from the Indian Police Service (IPS) and Indian Economic Services (IES). This, they say has led to stagnation at SEBI since its own staffers are denied the opportunity to be considered for the post of Executive Director.
Even more demoralising for them is the practice, started by various SEBI Chairman of bringing their own favourites as EDs.  SEBI officers point out that, M Damodaran brought in RK Nair from Corporation Bank, who later went on to become Member of Insurance Regulatory and Development Authority (IRDA). Mr Damodaran also brought in Sandeep Parekh as ED for Law. CB Bhave brought in KN Vaidyanathan and JN Gupta from the industry. The ED in charge of the legal department, J Ranganaikulu, was a SEBI employee, who resigned and became a contract employee to fulfil the norm of 50% EDs from outside SEBI.
The current Chairman, UK Sinha has brought in Gyan Bhushan from IES and RK Padmanabhan from IPS as EDs.
Some former SEBI officials say that this practice has allowed SEBI to become a fully Chairman-centric organisation controlled by one person, since senior officials in the rank of ED, are on short-term contracts and owe their tenure and their allegiance to just one man, the Chairman. In fact, the tenures of the past two Chairmen has seen a churning of ED appointments after their tenure ended.  This is not healthy for a watchdog organisation with phenomenal powers.  
SEBI officials also complain that there is no need for SEBI to look outside, when its own employees have become a talent pool for other regulatory bodies. For instance, a former SEBI ED is currently posted at the Competition Commission of India, one SEBI executive was a Member at the FMC and another is Acting Chief Executive of Mauritius Financial Services Commission. 
However, this argument could also be used against the SEBI Employees Association, since some would argue that such churning is healthy for the regulatory environment. But the comparison that SEBI officials make is with the Reserve Bank of India (RBI), which, until Dr Raghuram Rajan came in as Governor, did not allow any lateral entrants except at the topmost levels. 
The SEBI Employee Association wants SEBI "to show confidence in its own officers by doing away with the practice of filling up of 50% of the posts at ED level through Deputation/ Contract". They have argued that this is not in accordance with the SEBI Employee Service regulations and is contrary to arguments in favour of merit and suitability.



R Balakrishnan

2 years ago

The biggest crony club- Lots of paisa and no accountability.

Beware: Fraudsters sending I-T tax payment challan receipt via mail!

Now the Income-Tax Department has been encouraging taxpayers to file their returns online, email fraud is bound to proliferate and trap the gullible


It is probably a test mail as yet, but several people received a missive, ostensib

ly from the Indian Income Tax (I-T) department receipt for tax payment. The email id was a giveaway. And surprisingly, it uses '[email protected]' email ID for sending this spurious mail.



Two things, both I-T department and NABARD-National Bank for Agriculture and Rural Development, are separate entities with completely difference functions.


A mail, which bears an email id like this, "Income Tax Department " contains some text message and a link to "download and view your tax challan".


This not only is funny for those who know how the Income Tax department and its processes. The subject line of this fraud mail reads, "Your Tax Payment of INR 70,000 is Successful" and

 body text says, "Your recent tax payment is successful. The tax amount has been deducted from your netbanking access..


Please Follow the link below to download and view your Tax Challan." But more about the link later.


Basically, a challan is used for filing taxes, so why would anybody need it after the tax payment, and that too of INR 70,000. Read again INR 70,000. Nobody, at least no government body uses INR for rup

ees, which is denoted either Rs or with the new symbol.


Second clue about the fake nature of this mail is use of NABARD. As mentioned above, NABARD is an apex institution in India, which looks after the development of the cottage industry, small industry and vi

llage in

dustry, and other rural industries. NABARD refinances the financial institutions, which finances the rural sector. In short, NABARD has nothing to do with the Income Tax department and any individual taxpayer.


Third clue is the link, which the mail asks you to click in order to "download and view your Tax Challan". As mentioned above you do not need to download and view your tax challan, after making a tax payment! You get challan before paying your taxes, if any and not afterwards.


Now, coming back to the link. The link is related with an URL from TCRC Group. When clicked, it asks the user to download a .zip file, which probably may not be safe and contain malware or virus or a form seeking your personal details. So in any case, do not click on the link and download any file.


The domain is registered by one Noopur Patel from TCRC, with an address from Mumbai. Its telephone numbers are not in service. The registrant for this domain is, again a Mumbai-based entity. Both the owner and registrant of may be genuine, but someone may have been using their domain for this fake mail to host the so-called challan download.


The mail addresses you as "Dear Sir"; however, our own I-T Dept refers the taxpayer by full name like "Dear xxxxxxx xxxxxx xxxxxx".


Another point, the authentic email ID or server, our own I-T Dept uses is so the mail id would be like [email protected] and not like "Income Tax Department" .


Lastly, while the copyright shows as Income Tax Department, the signature image and links are used from NABARD with authentic link. In fact, except for the download link all other links used in this mail are authentic.


If you receive such mails, do not pay any heed and simply mark it as "spam" and press delete.  




5 Ways to Avoid Being a Cyber Theft Victim
Cyber security is not just a technical problem. It is a business risk that requires attention of a team including top management to ensure protection from cyber risks
There is no getting around it. Cyber threats are increasing. They will continue to do so. The world economy is slowing. The reason is emerging markets, including Russia and China. As other opportunities recede, talent will migrate to those areas that still provide employment. Since cyber theft is a growth industry in many of these countries, it will flourish as other sectors of the economy wilt. 
Besides as the industry matures it is becoming more efficient. It is segmenting and industrialising. It is not just a few talented programmer or über hackers practising their craft. Services provide everything from email design for ‘phishing’ campaigns to downstream money processing services.
To combat this problem the technology industry has created advanced software and hardware that are wonderful example of creative genius. Still no matter how high the walls, the defense still has to be manned by people. To insure that your firm will be protected there are five areas that require management’s attention.
Osaka castle was a wonder of its age. It was able to withstand a siege by one of Japan’s greatest leader, Tokugawa Ieyasu, in 1614. The secret of Osaka was defense in depth. There was not just one moat, but two. The same is true of any good cyber security system. It is not just the perimeter that needs to be defended, but the interior as well. You do not want the proverbial hard candy shell and an ooey gooey center.
The second important area has to do with the type of business. Cyber security spending has to match the security failures of your particular business. Do you have sales people that are constantly losing laptops on the road? Then full disk encryption is a necessity. Does your business have auxiliary devices like printers, digital scales or even medical equipment connected to your network? Just because these machines are not considered computers does not mean that cannot be used to compromise your information.
Third, has to do with the most important part of your cyber defense: people. When I was at Darden the UVa business school, there was a computer simulation of a failing business. The only input that actually helped save the business was more training for the employees. This is especially true for cyber security. People cause the vast majority of cyber breaches. Awareness of the tricks of social engineering can prevent circumvention of the rest of your security controls. 
Fourth, it used to be said that the only time that you wanted your name in the paper was when you were born, when you married and when you died. The advent of social networking has changed all that. Now your friends, relatives, business associates, Google, the NSA and every would-be cybercriminal knows who you are, where you are, what you ate for lunch. This is exceptionally valuable information if I want you to click on a link and infect your computer with malware. Less is more.
Finally, one of the best defenses is strategic, specifically strategic governance. Cyber security is not just a technical problem. It is a business risk. Like any other business risk it requires the attention of a team including top management. Enterprise risk management capability requires a larger focus than one specific area of expertise. To achieve the strategic goal it is necessary for all experts in any discipline to be multilingual. They have to understand other problems, but just as important is the ability to communicate in ways which other non-technical stakeholders can understand.
While it is impossible to eliminate this threat, especially as it metastasizes across industries and boarders. The risk can be substantially reduced if it is seen in context. It is not just a technical problem with a technical solution. It is a business problem that requires a management solution.
(William Gamble is president of Emerging Market Strategies. An international lawyer and economist, he developed his theories beginning with his first-hand experience and business dealings in the Russia starting in 1993. Mr Gamble holds two graduate law degrees. He was educated at Institute D'Etudes Politique, Trinity College, University of Miami School of Law, and University of Virginia Darden Graduate School of Business Administration. He was a member of the bar in three states, over four different federal courts and speaks four languages.)


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