Vikram Akula quits SKS Microfinance

“Vikram Akula has tendered his resignation as the Executive Chairman and Director from the Board of Directors of the company with immediate effect. The Board has accepted the same with immediate effect,” SKS Microfinance said in a filing to the Bombay Stock Exchange. The company did not give any reason for his resignation.

For the quarter ended September 30,the SKS Microfinance reported a net loss of Rs 384 crore,against a Rs 80.54 crore profit in the corresponding period a year ago.

Shares of SKS closed 4.98 per cent higher at Rs 116 on the BSE.

SKS pushed the microfinance sector into public limelight after the company mopped up over Rs 1,650 crore (around $350 million) through its initial share sale in July 2010.

The public issue,which attracted huge participation from retail investors,also stoked expectations of more industry players tapping the capital market.

The company,however,witnessed some low moments following the ouster of SKS Microfinance CEO Suresh Gurmani in October last year,who was at the helm of the micro finance lender at the time of its dazzling IPO. He was replaced by M R Rao as the MD and CEO for the next three years.

Gurmani’s removal sparked off fresh concerns about corporate governance among MFIs.

Akula,who founded SKS Microfinance in late 1997,led the organisation until 2004. Then he joined McKinsey & Co in Chicago,only to return to SKS in 2005 and convert it to a for-profit company.

Since long Akula has been reportedly facing trouble over management related issues with the board members.

During the September quarter,SKS’s provisions against bad loans rose to Rs 353 crore,a twenty-fold jump from Rs 17 crore in the year-ago period.

For the six months ended September 30,SKS incurred a net loss of Rs 603 crore. It had a profit of Rs 147 crore in the same period last fiscal.

Micro finance — the practice of giving small loans to poor people — have come under intense scrutiny after a string of farmer suicides in the Andhra Pradesh,leading to the creation of an Act to regulate their activities.

The micro finance industry is going through a rough weather after the Andhra Pradesh government introduced an Act last year to regulate their activities. The MFIs are now finding it hard to get resources from banks.

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