Controversy-ridden SKS Microfinance's Q2 net up 2 folds at Rs 81 cr

SKS Microfinance, facing allegations of using strong-arm loan recovery tactics, today reported over two fold jump in its net profit at Rs 81 crore for the second quarter of this fiscal compared to the year-ago period.

A board meeting, attended by sacked CEO Suresh Gurumani among others, approved the results showing a 77 per cent rise in total income to Rs 366 crore during the three-month period ended September 30, 2010, SKS said in a filing to the Bombay Stock Exchange.

SKS is the first ever microfinance company in India to get listed on the bourses. Since then, it is embroiled in one controversy after another.
    
First, Gurumani was sacked from the post of CEO by the board for "inter-personal" reasons. However, Andhra Pradesh High Court had allowed him to continue as a director till the final orders come.
    
It was followed by the whole micro finance sector coming under the government and RBI scanner as Andhra Pradesh reported a number of suicide cases, allegedly due to muscle power used by these companies for recovering their dues.
    
The Andhra Pradesh government promulgated an ordinance last week to tighten noose on MFIs, while RBI set up a sub-panel to look into the functioning of these lenders.
    
Yesterday, Andhra Pradesh police had arrested three people working with SKS Microfinance and another MFI, Spandana, on charges of harassment of a borrower.