The poster boy of Indian microfinance Vikram Akula today made an unceremonious exit from SKS Microfinance of which he is founder-chairman. Akula resigned from the board with immediate effect.
The Tufts and Yale-educated Vikram Akula, who set up SKS in 1997, has been under pressure in the wake of huge losses suffered by the company.
For the quarter ended September 30, the SKS Microfinance reported a net loss of Rs 384 crore, against a Rs 80.54 crore profit in the corresponding period a year ago.
The reason for the downslide in the company fortunes is the change of laws in Andhra Pradesh, which inhibited SKS from getting back its loans. AP had brought in a tough law against forcible collection of dues from the loaners.
Ironically, Vikram and SKS won several awards, including the Ernst & Young Entrepreneur of the Year in India, besides being named by Time magazine as one of the world’s 100 most influential people for the year 2006.
It is widely accepted that the former McKinsey consultant made important contributions to the industry especially in terms of scale. The Hyderabad-born moved to the US when he was just three years old.
Akula has also been fighting a bitter custody battle with his former wife over their child, which became a professional issue following her complaints to Sebi and other agencies against Akula’s alleged omissions and commissions in his business.
His former wife Malini M Byanna publicly accused Akula that “he has gone out of his way to silence, subjugate, and suffocate individual after individual in both his private and corporate life, with the greatest causalities being his own wife and child, who have been traumatised and terrorised for over 12 long months”.
The company has appointed P H Ravi Kumar, independent director, as the interim non-executive chairman.
However, Ramesh S Arunachalam, an expert in rural finance says, “It seems unlikely that Vikram Akula’s exit will transform SKS Microfinance into a better-governed and -managed microfinance company. Only time can tell if and whether the exit of Vikram Akula would bring better times to SKS micro-finance, its investors and clients”.
For somebody who could make even Rahul Gandhi sing paeans for his services to the rural poor, Akula’s downfall is rather fast. The 41-year-old PhD from Chicago Univeristy is also related to Congress MP V Hanumanth Rao.
