Vikram Akula, founder of India’s first public listed and till recently the largest microfinance firm, has resigned as executive chairman and CEO of SKS Microfinance Ltd with immediate effect. The company has said in a statement to the exchanges that SKS’ independent director P.H. Ravikumar has been appointed as the interim non-executive chairman.
P.H. Ravikumar, who was earlier CEO of National Commodities & Derivatives Exchange Ltd (NCDEX), is currently the head of Invent Assets Securitisation & Reconstruction Pvt Ltd.
SKS Microfinance has also entered into non-compete and non-solicitation agreements with Akula. “The company and Dr Akula have subsequently entered into an agreement for their respective future obligations such as consultancy services by Dr Akula to the company, non-compete and non-solicitation obligations, etc.,” the company said in an additional statement.
SKS Microfinance scrip closed at Rs 116, up 4.98 per cent on Wednesday in a weak Mumbai market which shows the investors welcomed the move. Although the announcement came after trading stopped for the day, it was widely speculated that Akula would step down from the board today. The company was listed in August 2010 at a share price of Rs 985 in a issue oversubscribed 14 times.
The company recently announced plans to raise Rs 900 crore through a qualified institutional placement (QIP), in which some of its existing investors have showed interest even as the stock trades near all time low of Rs 105.5, having lost over 90 per cent from its highs.
Akula has worked in rural India for two decades, starting his career in 1990 as a community organiser of women’s self-help groups for the Deccan Development Society, a non-profit working in rural Andhra Pradesh. He then joined the World Watch Institute in Washington DC as a researcher.
Akula founded SKS Microfinance as a non-profit organisation in late 1997 and led it until 2004, when he joined McKinsey & Company in Chicago as a management consultant. In 2005, he returned to SKS when it converted to a for-profit NBFC. He led the company as CEO till November 2008, and took the position of executive chairman after SKS appointed Suresh Gurmani (who was fired in October 2010).
SKS reported a net loss of Rs 384 crore for July-Sept quarter, compared to a net profit of Rs 81 crore during the same quarter a year ago. Its revenues slipped 66.5 per cent to Rs 123 crore, down from Rs 366.6 crore a year ago.
Investors in SKS include Catamaran Management Services, WestBridge, Sequoia Capital India, Sandstone Investment Partners, Kismet Microfinance, George Soros, Tree Line Asia and veteran venture capitalist Vinod Khosla.