SKS Trust, one of the bigger shareholders in SKS Microfinance, pushing for Vikram Akula's nomination to the board, is yet to hear a formal response. Akula was the founder of the microfiance company who had quit under pressure and the company is opposed to offering him a board seat. Biksham Gujja, Chairmam of SKS Trust says it is a very straightforward request that a 12.6 percent shareholder needs to get a board seat. He fails to understand the objections
Though he is still expecting a formal reply, he is not opposed to taking all the actions necessary to get its rights back, including the legal route.
Below is the verbatim transcript of Biksham Gujja's interview on CNBC-TV18
Q: If you can tell us the facts as of now, have you made a formal request that Vikram Akula should represent SKS Trust. What has been the board’s response?
A: I wrote a letter to SKS board nominating Vikram Akula who started SKS, who also started SKS Trust, to be our representative when we reached 12.6 percent of the SKS Microfinance; we are the largest shareholders of the company. I have not got a formal response to that simple and polite request. Instead, there were several media reports wherin questions were raised on unrelated matters. The objections were not factually correct either, like SKS Trust not being governed properly or no shareholder is eligible to nominate (implying) Vikram Akula is not accepted.
I am reading all these in the media, but we have not received any formal reply for a very simple straightforward request from the trust which is the largest shareholder today, to get a board seat and then my nomination of Vikram Akula to the board of the SKS.
Q: If they continue with the silence, what will be your next step?
A: We are exploring all our options and I want them to communicate to me as to what their concerns are. Vikram Akula had started SKS. I am not able to see what the objections are, instead of it they are saying that the Trust is not managed properly.
We are shareholders of the SKS, they are not our shareholders. If they have concerns about it, certainly they can come out and openly debate and discuss but these are not related ones. An extremely simple request, very straightforward that 12.6 percent shareholder needs to get a board seat and there are number of board members with much less shareholding. It is certainly a convention to have a largest shareholder represented in the board.
Q: If you do not get any kind of formal response will you be using any kind of legal recourse as well, will you be approaching the company law board and if yes then by when do you think you would go ahead with that move?
A: I am still expecting a formal reply from them. We will be patient and as I said we will take all the action required to get our right back and also I will be requesting them once again through CNBC-TV18 that send a reply to the request I have made and whatever that request maybe, if they are not able to listen to the largest shareholder of the company, I am afraid how they will be listening to borrowers and their concerns. I am sure they must be having some mechanism to listen to the shareholders and their concerns.
Q: Are you looking for only Vikram Akula to get board seat or are you looking for him to get some managerial role in the company as well?
A: First we nominated him to the board. Regarding a managerial role, we do not have any say. Once he is in the board, the board will put the managerial role, we are not specifically asking anything other than Vikram getting on to the board.
We nominated Vikram because he is the most qualified person, he is the most experienced person, he started the SKS Microfinance and he started the Trust. Who else can be more suitable than Vikram to be representing in the board? So, I nominated him. I sincerely thought he will bring a lot of confidence in the borrowers, confidence in the investors, after all SKS Trust is the largest shareholder. I have a responsibility to see that the company does well and that’s the reason I nominated him.
Q: What will be your next step? Are you going to approach the company law board?
A: As I said we are not ruling out any of our options and first thing is I would request them to come back to me and I would want a dialogue processed. If they have a genuine concern about either giving a board seat to the Trust or Vikram’s nomination, they can come back to me and we will have a dialogue and I will wait for a couple of weeks.
One of my Trust’s board member is a Supreme Court advocate, we have a legal team. I would rather like to avoid all that because that will hurt the borrowers, that will hurt the share value but I would like to enter into a dialogue. I think it’s the sane way to do it and I would also personally believe that is the responsibility of the board, any responsible board will listen to the largest shareholder.
Q: If the objection is to Vikram Akula, will you be replacing that with another name as SKS Trust’s nominee?
A: He will be one among the nine members. I didn’t hear any opposition. If some individuals in the board have issues, he is not going to take the decision by himself. The replacing question will only come when they articulate what their concerns are, how those concerns are going to affect the company. That is the bottomline. They have a duty to see that the company does well. It is not the individuals overriding the nomination of other shareholders and if there are reasons then we will discuss them. But going to the media shows they are not responsible.
Imagine a situation where 12.6 percent shareholder of a US trust fund or hedge funds, do you think they would have treated like this. This is what the fundamental question is that they need to learn to respect. These are the trusts who are the promoters of it, they need to learn to respect the nomination – if they have a concern, they should come back to us, articulate that, discuss with me or with our board instead of making all sorts of things - first they should stop that and if there are few individuals then why cannot they come out and articulate that.