Hyderabad, October 13: Even a microfinance sector is being rocked by reports of borrower distress in Andhra Pradesh, SKS Microfinance Ltd, the biggie in the sector, is caught up in boardroom troubles.
The company fired its CEO and managing director Suresh Gurumani last week, citing no reasons to the stock exchanges. Reports emanating from the company indicate that the dismissal was primarily due to Gurumani’s interpersonal issues with senior management.
SKS founder and executive chairman Vikram Akula did not elaborate on the interpersonal issues, although sources suggested disagreement between him and Gurumani over the future structure of the firm.
“The board made its decision and it was in the best interest of shareholders and stockholders,” said Akula, adding, “There were failed attempts to reach a settlement with Gurumani on his exit terms, forcing the board to fire him.”
He denied that there was any power tussle among senior staff. Speaking to the media in Mumbai, Paresh Patel, CEO, Sandstone Capital LLC, which holds 10.6 per cent stake in SKS, said there were differences and that the issues could have been precipitated after Akula was appointed the executive chairman.
Gurumani was unavailable for a comment. Last week, the High Court had passed an interim order directing SKS to retain Gurumani on the company’s board. Gurumani had been with SKS as MD & CEO since Dec. 2008. He owns 235,000 SKS shares with a market value of about Rs 300 crore. He was given a hefty raise just last month.
In August, SKS, founded by Akula in 1998, raised Rs1,600 crore from its high-profile listing. As of March 31, it had 6.78 million borrowers with total disbursements of more than Rs14,000 crore.
It has a high-profle board of noted industrialists and investors such as US billionaire George Soros, venture capitalist Vinod Khosla and Infosys founder N R Narayana Murthy.
–Agencies