Conservative banker to head SKS Microfinance?

The buzz in microfinance circles is that Vikram Akula, theentrepreneur behind SKS Microfinance and until recently the poster boy of themicrofinance industry, may either resign or be asked by his board to step down.Akula is not talking and none of his senior officials respond to calls. BT infact reached their office after their last results (when they posted recordlosses) and since then has made several unsuccessful attempts to reachthem.  Although the company has yet toofficially respond, most people in the industry say what is being speculated nowhas been talked about in industry circles for some time now.

So, what would Akula not being at the helm mean for thecompany? It depends whom you talk to. Those sympathetic to Akula say thepromoter or the founder cannot be singled out in this case as all decisionswere board decisions and Akula did not create the crisis in Andhra. But then,as BT found, there are many who say Akula stepping down is the right wayforward for SKS.

Incidentally, nobody is willing to go on record whilediscussing Akula or SKS . The argument in favour of change at the top of SKS is thatAkula failed to act like a leader, not just for his company but for the entireindustry.  He missed a major chance atleadership for the sector.

While nobody could have predicted regulatory changes, hecould have handled things differently, not only in the way he handled the exitof his CEO just after the IPO but even at the industry level he could have donea lot to engage and work with the government.

But does that mean the promoter or the founder and executivechairman in this case should resign or be asked to quit by the board? Here iswhat someone who has seen the company and the sector closely over the years hasto say: "Somebody has to be held accountable for such a large loss ofshareholder value.  Even after the AndhraPradesh government's clampdown on the microfinance sector in October last year,the Bombay stock exchange showed the company's scrip at a 52-week high onDecember 15, 2010 at Rs 750.  Today -November 22, 2011- that's down to just Rs 110.50. And CEOs get fired for suchperformance whatever the reason. Also, people gave money [to SKS] because itwas Vikram Akula's company.''

What now? The speculation is that the man in charge couldnow be SKS board member P.H. Ravikumar. He is considered by many to be a conservativebanker and he has played an important role in building institutions. He iscurrently the head of Invent Assets Securitisation & Reconstruction and hasbeen the managing director and CEO of the National Commodities &Derivatives Exchange Ltd. (NCDEX) (2003-2008) and earlier Senior GeneralManager, ICICI Bank. The SKS website says he has about 37 years of experience infinancial services sector.

Ravikumar was Senior General Manager and Head of EmergingCorporates (SMEs) and Agri Business at ICICI Limited. His responsibilitiesincluded business strategy and risk management. Today, he's an independentdirector on the SKS board.