Sucheta Dalal :Microfinance: ba<x>seless report. Really?
Sucheta Dalal

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Microfinance: Baseless report. Really?  

September 14, 2011

Pressure mounts on SKS boss

Sucheta Dalal

On 14th July, we asked JS Sai, spokesperson of SKS Microfinance, to comment on our information that investors wanted to remove Vikram Akula from the top job. He said, “In case you are going ahead with your baseless report,” here is the response: “Your statement that ‘some PE (private equity) investors have talked to SKS Microfinance about removing Mr Vikram Akula as head of SKS’ is absolutely baseless. SKS Microfinance stoutly denies this.” Meanwhile, different sources reconfirmed that corporate and PE investors were unhappy with Mr Akula’s style of functioning; one source said they didn’t have the numbers to pull off the board coup required to remove a founder-director. Then, on 12th August, there was another indicator of turmoil when Pramod Bhasin suddenly stepped off the board. Finally, on 16th August, The Economic Times reported that “Vikram Akula, the one-time poster boy of microfinance and founder-chairman of SKS” could lose control over the company and that board members had suggested that he step down. The unhappiness was attributed to his frequent travel abroad to resolve personal issues. This made it difficult for him to devote enough time to his job when the business was in a crisis situation. We hear that several investors find him high-handed in dealing with employees. Interestingly, this time around, SKS’s spokesperson is not issuing aggressive denials anymore. Meanwhile, banks are also turning to the press, since their loans may soon be classified as ‘non-performing’. Sources say that the announcement by BASIX, India’s oldest micro-financier, that it may close down and the merger plans of Spandana Sphoorty Financial, Share Microfin and Asmitha Microfin are the result of some hard nudging by lenders. Therefore, the travails of this once-glamorous do-gooding business continue.

-- Sucheta Dalal