Gurumani, Akula differed on future of SKS Micro

SKS Microfinance founder and executive chairman Vikram Akula on Tuesday broke his silence over the ouster of the company's former managing director and chief executive officer Suresh Gurumani, saying his services had been terminated on account of inter-personal differences with the senior management.

He declined to specify what the differences were, but denied a power tussle. The SKS board terminated Gurumani's services on 4 October, some four years before his contract expired, and appointed M R Rao as the managing director and chief executive for a three-year term. (See: SKS Microfinance sacks Gurumani).

''The board felt Gurumani was not the right candidate to lead the institution at a time when the dynamics of microfinance industry changed after the company's initial public offering (IPO), and felt that a person with intimate knowledge of running the company as also experience in the field should lead the organisation,'' Akula told newspersons.

Asked to explain what these ''changed dynamics'' were, he said there were many more entrants in the sector who came with a different understanding of the MFI sector.

Reports suggested that there was disagreement between him and Gurumani over the future structure of the firm, at a time when MFIs are under fire in the media, and the Andhra Pradesh government is contemplating legal steps against their methods.

''The board made its decision and it was in the best interest of shareholders and stockholders,'' said Akula, adding, ''There were failed attempts to reach a settlement with Gurumani on his exit terms, forcing the board to fire him.''