Less than two months from the blockbuster listing of India's first microfinance entity, SKS Microfinance has reported a top-level shakeup.
The Hyderabad-based firm, which is backed by a battery of investors, has announced the termination of the appointment of its CEO and managing director Suresh Gurumani. The board of SKS has replaced him with current deputy CEO M.R. Rao, effective today subject to regulatory approvals. The reason for the rejig at the senior management was not disclosed.
"Passed a resolution terminating the appointment of Mr. Suresh Gurumani as Managing Director and Chief Executive Officer of the Company (pursuant to the terms of his appointment letter with the Company), and withdrawn all powers and authorities granted to him or otherwise enjoyed by him in the Company as Managing Director and Chief Executive Officer of the Company, with immediate effect," said SKS in statement to the exchange.
Reacting sharply to this news, the share price of SKS fell nearly 6% to Rs 1,275.15. The shares of SKS have appreciated more than 50% from the listing price of Rs 985 per share to touching a high of Rs 1,490.
A chartered accountant, Gurmani joined SKS as the CEO in November 2008. He was earlier director at consumer banking at Barclays. His appointment came after the $75-million private equity round in SKS, one of the largest PE investment in MFIs. SKS founder Vikram Akula moved to the role of chairman after Gurmani took over.
According to SKS DRHP, Gurmani had a five-year contract from April 1, 2009 to expire on March 31, 2014.
SKS also said that Ashish Lakhanpal has resigned as a director to comply with the prescribed ratio for independent and non-independent directors. Lakhanpal represented Kismet Capital, LLC, which sold a 4.5% stake in the IPO for $48 million. Kismet still holds a 7.8% stake in SKS after the issue.
SKS Microfinance more than tripled its net profit for the quarter ended June 30, 2010 to Rs 66.7 crore with total income from operations almost doubling to Rs 284 crore for the same period.