Gurumani fired because of interpersonal issues: SKS Microfin

Tuesday, October 12, 2010

MUMBAI - India’s largest private small scale lender SKS Microfinance fired its Chief Executive Suresh Gurumani because of “interpersonal issues” with the senior management, the company’s founder Vikram Akula said Tuesday.

Gurumani was sacked last week, less than two months after SKS made a stupendous stock market debut, listing at a market capitalisation exceeding Rs.8,000 crore.

The company said all the directors on the board of the company were in favour of Gurumani’s termination.

SKS’s clarification follows an order of the Andhra High Court, which was approached by a shareholder, seeking remedial action.

A high court bench of Justice G. Bhavani Prasad has passed an interim order asking the company to retain Gurumani on its board of directors till further orders and restrained newly appointed chief executive and managing director M.R. Rao from taking any major policy decisions.

The company, however, said the High Court had not held Gurumani’s termination to be in violation of any laws. “Also, there was no direction by the High Court to retain Gurumani as a director on the board,” SKS said in a regulatory filing.

“The said court order simply restates a statutory provision of the Companies Act that already exists: namely, that any major policy decisions should be approved by the board of directors,” it said.

Gurumani, who is still serving on the board of the company, will now in all likelihood be removed from this capacity as well at the annual general meeting.

“Gurumani shall continue in his capacity as a director on the board of the company, until removed by shareholders at a general body meet, as per the Companies Act, 1956,” said the statement from SKS.

Filed under: Economy

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