)
The management of SKS Microfinance has contested its estranged ex-chairman Vikram Akula’s charge that operations have deteriorated since he was made to quit.
For instance, in an interview with Business Standard, he’d said the gold loan scheme it was running was akin to “pawn broking”, which the company had begun after he’d left.
However, the present management says the scheme was cleared by the board in September 2010, and the extension of the programme to 50 more branches was endorsed in March 2011, when Akula was executive chairman. It notes he separated from the company only in November 2011.
In a written statement, it has said the truth is, “The distribution of insurance products were commenced by SKS much before the separation of SKS and Dr Akula.” And, that Akula was managing director when it started distributing insurance policies in 2008. Not only that, the company’s prospectus, which Akula himself signed, highlighted the diversification into insurance as a salient feature.
The company has also said the allegations of coercive recovery made against microfinance institutions by the Andhra Pradesh government in Krishna district pertained to the period when he was directing SKS.
Akula had contended that while he ran SKS from 1997 to 2008, it had extraordinarily strong processes and high quality services. For over a decade, there were no allegations of coercive recoveries or group pressure, he said.
Akula has also said he wanted to sell his shares in the company so that he wouldn’t have any personal financial benefit from potential involvement in SKS. He has said he would love to come back and work on a voluntary basis in the SKS again. He added he had incurred a loss by selling the shares.
Responding to this, the company says Akula’s employee stock option shares were issued to him at Rs 49.77 each, while the market price on the day he sold these were Rs 132 a share. So, it fails to understand how he could have suffered a loss.
Akula has also raised concern that had he stayed on as CEO for those last two years, instead of returning to the US and moving to a non-executive board role, things would have worked out differently in SKS.
