2G accused move HC against shifting of trial to Tihar jail

Around 15 defence lawyers mentioned the matter before a bench of justices SK Kaul and Rajiv Shakdher and sought its intervention on the decision to shift the trial saying it would cause a lot of inconvenience to the lawyers and the accused

New Delhi: The accused in second generation (2G) spectrum case today approached the Delhi High Court challenging its administrative decision to shift the trial in the case from its present venue at Patiala House courts to the high-security Tihar jail, reports PTI.

Around 15 defence lawyers mentioned the matter before a bench of justices SK Kaul and Rajiv Shakdher and sought its intervention on the decision to shift the trial saying it would cause a lot of inconvenience to the lawyers and the accused.

“This case is not related to any terrorist activity where there is a security threat. It is only a case of economic offence that does not warrant this decision,” one of the defence lawyers said in the packed courtroom.

“Moreover, bigger courtrooms are already available in the Patiala House court complex where the trial could be conducted,” he said.

Justice Kaul responded to the plea by saying, “I will personally meet the acting Chief Justice and take up the matter...

“Suppose, you do not get adequate relief, then you can always move a writ petition on the issue,” he observed.

The court also said that the decision to shift the trial was an administrative one which had been taken by the acting chief justice, and he should be consulted on it. The bench asked the lawyers to approach it again later today.

The special CBI judge conducting the trial in the matter had yesterday announced shifting of the trial to Tihar jail from 24th November in accordance with a Delhi High Court notification of 21st November.

“In exercise of the powers conferred by section 9 (6) of the CrPC, 1973, the acting chief justice and judges of this court (Delhi High Court) have been pleased to order that the trial of the 2G spectrum cases shall be held in Tihar court complex, New Delhi, according to law,” the notification, issued by the high court, read.

All the accused, including former telecom minister A Raja and DMK MP Kanimozhi, have opposed the move.

“I do not know what is happening in this country. The shifting of the trial to Tihar jail would create a lot of problems as we will not be able to properly have legal consultation with our counsel.

“Till now, the lawyers could reach Patiala House courts from the Supreme Court or the high court within 10-15 minutes, but it would not be possible for them to reach Tihar jail as they would have to leave all their other cases,” Mr Raja had said yesterday after the judge had apprised them of the decision to change the trial venue.

Meanwhile, the Supreme Court today granted bail to five corporate honchos—Unitech MD Sanjay Chandra, Swan Telecom director Vinod Goenka and Reliance Anil Dhirubhai Ambani group executives Hari Nair, Gautam Doshi and Surrendra Pipara, arrested for their alleged roles in the case.

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Life after Vikram Akula at SKS Microfinance: Some unanswered questions

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

The board of SKS Microfinance is said to be meeting in Mumbai today and it has been widely speculated that Vikram Akula is all said to resign from SKS Microfinance as its executive chairman. While the reasons for this are not exactly known, it has been suggested that the poor performance of the company during the last quarter has brought increased pressure on Mr Akula to resign.

Whether it happens or not is something we will hopefully know in a short while today. That said, if indeed Vikram Akula quits as has been extensively reported in the media, what are the implications for SKS Microfinance as a company?

Three questions are extremely relevant for investors and other stakeholders:

a)    What will happen to SKS in its post Vikram era? Would the corporate governance issues and operating practices change for the better?

b)    What about Vikram Akula’s successor and others at the helm of SKS (if and when he quits)? Will they be able to shepherd SKS Microfinance through its turbulent lines? What is their understanding of microfinance? What is their track record of governance and management?

c)    What about the mutual benefit trusts (MBTs) and the low-income people to whom they belong? Who will control them? Who will safeguard their interests in SKS Microfinance? Who will assume responsibility for the huge (notional) losses caused to the MBTs owned by the low-income people?

A small divergence is necessary here. It is important to note that while many corporate and other investors have divested their shares, the MBTs have continued to hold (a majority of) their (huge) investments despite the steeply falling share price of SKS Microfinance (which stood at Rs112.90 per share today). Please recall that a little after SKS got listed, the shares were selling close to an all time high of Rs1,490.70 per share —this represents a fall of almost 92.43% from this super (share) price indeed.

                                    Ownership Pattern
(http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcd=533228)

 
That said, to set the record clear, it is indeed ironical that Vikram Akula is being pressured to resign by a board that was, at least in part, responsible as much, for many of the happenings at SKS Microfinance as him.

Specifically, it can be said that this board has remained a mute spectator (and thereby, perhaps even endorsed) the serious corporate governance issues and questionable operating practices reported at SKS microfinance in the public domain – (http://www.mssriram.in/sites/mssriram.in/files/commercialisation-epw-printcopy_0.pdf).

And the board (with some common members) was undoubtedly a party to the huge growth story of SKS Microfinance during the period 2006 to 2010 as shown in table below:
 
It must also be noted that much of this growth apparently led to increasing frauds and deficient operating practices at SKS Microfinance as has been reported previously (Increasing frauds, internal lapses at MFIs: Need to strengthen supervisory arrangements to protect the poor,)

And last but not the least, this board, by and large, again remained quiet during the unceremonious removal of Suresh Gurumani, the then CEO (through a hurriedly convened board meeting and especially conducted on a Sunday), after he had led SKS Microfinance through a spectacular initial public offer (IPO) in 2010

Therefore, whether it was the interest-free loan to the founder MD to enable him to buy shares in SKS Microfinance or the unceremonious sacking of the CEO after the successful IPO or the burgeoning growth of SKS Microfinance, it is clear that the SKS board has to bear ultimate responsibility.

That being the case, 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…

(The writer has over two decades of grassroots and institutional experience in rural finance, MSME development, agriculture and rural livelihood systems, rural/urban development and urban poverty alleviation/governance. He has worked extensively in Asia, Africa, North America and Europe with a wide range of stakeholders, from the private sector and academia to governments)

 

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COMMENTS

Job Search Sites

5 years ago

Nice. I like this post its very informative thanks for share it. Microfinance is usually understood to entail the provision of financial services to micro-entrepreneurs and small businesses, which lack access to banking and related services due to the high transaction costs associated with serving these client categories. The two main mechanisms for the delivery of financial services to such clients are relationship-based banking for individual entrepreneurs and small businesses; and group-based models, where several entrepreneurs come together to apply for loans and other services as a group.

omprakash yadav

5 years ago

sks microfiance ltd.Vikram akula anounce that he resion sks mfi

Rajan Alexander

5 years ago

Hi Ramesh!

There are two key points:

a. Dr Akula who popularly known as Dracula what ever it was, was a NGO fellow. Now all those on the board represent financial vultures. Their true face

b. The board was to reposition SKS as a rural finance company. This is good. The slur on M/f by SKS posing as a MFI comes to an end. They position makes Akula redundant and could be one reason why they got rid of him but prehaps not they only one

c. Third, if they reposition as a rural finance company what happens to their priority sector loans they now enjoy?

Deepak kumar suman

5 years ago

Popular
sksmicrofinance Stock market

Total Shareholder Return, Stock market boom, Share price, Stop price

MD Azharul Islam

5 years ago

SKS Was ALive Or Finish

SAIL sees demand growth for steel halving to 6% this fiscal

The decline in steel demand has been attributed to rising interest rates, according to SAIL commercial director Shuman Mukherjee. However, the company is very optimistic about the demand for steel in the country in the long-term

Mumbai: State-run steel giant SAIL sees the domestic demand growth for steel coming down to 6% this fiscal from 10%-12% last year due to difficult interest rate regime and slowdown in key sectors, reports PTI.

“Steel demand in the current fiscal is expected to be around 6% as interest rate is too high, impacting demand from key sectors like auto and construction in the recent time,” SAIL commercial director Shuman Mukherjee told an industry conference arranged by Mjunction here on Tuesday.

He said traditionally the second half is a better period for steel demand and hoped that it may pick up in the fourth quarter.

On the back of rising inflation, the Reserve Bank of India (RBI) has raised key policy rates by 13 times in the past 20 months.

This has, in turn, squeezed demand in the economy, especially in the rate sensitive sectors like auto and construction.

Car sales fell 23.8% October, the biggest percentage drop since December 2000 due to rise in cost of borrowing.

The steel major also said the fall in price of key raw materials like coking coal is not giving any cost advantage due to a depreciating rupee.

“Though there is some fall in raw material prices like in case of coking coal, the fall is largely nullified due to the depreciating rupee,” Mr Mukherjee said.

On the pricing front, another top official of SAIL said price will remain stable till March. “Looking at the demand scenario, steel prices will remain stable till March,” executive director for marketing-long products VK Mehta said.

However, the company is very optimistic about the demand for steel in the country in the long-term.

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