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Sep 15, 2013, 12.44 PM IST | Source: CNBC-TV18

SKS Micro won't let Akula on board, may review other names

SKS Microfinance board members unanimously oppose giving a board seat to its founder Vikram Akula saying his return is not in the best interest of either the company or its borrowers,

Gopika Gopakumar

Correspondent, CNBC-TV18

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The Board of SKS Microfinance remains divided over allowing board representation to the largest shareholder SKS Trust advisors. It stiffly and unanimously opposes giving a board seat to its founder Vikram Akula saying his return is not in the best interest of either the company or its borrowers, reports CNBC-TV18's Gopika Gopakumar. CNBC-TV18 learns that main opposition comes from the PE shareholders who also control the board of SKS Microfinance.

But, as things stands now, the Board may review any other nomination of SKS Trust other than Akula On Sunday, SKS Trust had proposed Akula's name to represent it on the Board of the microfinance company, but the Board made it clear that it cannot be considered. Akula had to quit in 2011 when the company was reeling under huge losses. The microfinance company stated on Tuesday that under its Articles of Association, no shareholder has any right to nominate a director. The SKS Board is looking for independent directors who will add value to the company and will review if there is a clause that allows SKS Trust to nominate directors. CNBC-TV18 learns, that certain section of the Board is concerned about the governance of the Trust whose real intention may not be in the interest of the borrowers.

SKS Trust Chairman, Biksham Gujja denied any allegation with respect to the governance issue raised by certain section of the SKS Microfinance board. SKS Trust Chairman made available an email communication from PH Ravikumar, Chairman SKS Microfinance in which he clarifies his stand to Biksham Gujja,"Based on the discussions I have had with my directors, I confirm to you that none of the members of our Board of Directors including the executive management have made the statement (about governance of SKS Trust) in your mail."

PH Ravikumar is yet to respond to CNBC-TV18 email query. Ravikumar though when contacted on phone refused to comment on the email communication or its content.  Email response from SKS Microfinance is awaited.

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