Gurumani not right for changed microfin industry: SKS

SKS Microfinance chairman Vikram Akula admitted on Tuesday that the services of the companys former MD and CEO,Suresh Gurumani,had been terminated on account of inter-personal differences with the senior management but denied any power tussle.

SKS Microfinance chairman Vikram Akula admitted on Tuesday that the services of the companys former MD and CEO,Suresh Gurumani,had been terminated on account of inter-personal differences with the senior management but denied any power tussle. Akula,however,chose not reveal what these differences exactly were. On October 4,the SKS board terminated Gurumani’s services and appointed MR Rao as the MD and CEO for a three-year term.

The board felt Gurumani was not the right candidate to lead the institution at a time when the dynamics of microfinance industry changed after the companys initial public offering (IPO) and felt that a person with intimate knowledge of running the company as also experience in the field should lead the organisation,” Akula told newspersons. Asked to explain what these changed dynamics were,he said there were many more entrants in the sector who came with a different understanding of the MFI sector.

Akula said the board felt that Gurumani was not the right candidate to lead SKS in its new phase of growth when it planned to roll out secured micro home loans and gold loans. Accordingly,MR Rao,who had lead the organisation from the front for the past few years,was chosen for the job. Akula added the Securities and Exchange Board of India (Sebi) had enquired into the exit of Gurumani and SKS had responded to the queries. However,there has been no enquiry from the Reserve Bank.

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Asked how it was that a person who had performed so well in the past was not equipped to lead the company in the future,Akula said,There was no problem with Gurumani’s performance but the dynamics of the industry had changed. When newspersons pointed out that the company must surely have been aware of its future growth strategy a couple of months back,Akula said,There is a difference between a pilot and a launch.

Interestingly,neither Akula nor the two other directors present at the press conference responded to newspersons who referred to the hike in Gurumanis remuneration as recently as September 7. However,an SMS sent by the company’s PR agency later in the evening said the bonus and increment had been approved by the board on July 16. Asked what had changed between September 7 and September 27,Akula said the board had become better aware of the changed situation in the microfinance industry. Sandstone Capital Advisors CEO Paresh Patel,who is a shareholder of SKS,said on the sidelines of the press conference,The board got to know of the inter- personal issues between Gurumani and the senior management on September 7,2010.

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