Kuala Lumpur: Seeking to give new impetus to the bilateral relations, India and Malaysia today formally announced firming up of Comprehensive Economic Cooperation Agreement (CECA) to boost trade and decided on a range of other engagements in various sectors, including defence, reports PTI.
The two sides signed five pacts in various areas after wide-ranging talks between prime minister Manmohan Singh and his Malaysian counterpart Mohd Najib Tun Abdul Razak and resolved to impart strategic dimension to their relations.
Signing a document with regard to announcement of CECA, the two leaders said the agreement, aimed at allowing freer movement of goods, services and investments, would come into effect on 1st July next year.
"Today marks a turning point in India, Malaysia relations," Mr Singh told a press conference after the meeting.
He said the discussions with Mr Razzak had laid the basis for multi-faceted partnership between the two countries.
The two prime ministers also launched the CEO's Forum, which is expected to help forge closer and deeper economic engagement between business and industry of the two countries.
"India welcomes greater investment from Malaysia in infrastructure and manufacturing sector and Indian companies would also want to do business in Malaysia," Mr Singh said.
Mr Razzak said Malaysia would be happy to share India's economic success and join its journey for economic development of the country.
"We must give new impetus to this relationship. I indicated to prime minister Singh that Malaysia is ready for deeper and more intensive relationship," he said
Mr Razzak said the two countries have set a trade target of $15 billion by 2015 and expressed confidence CECA will help achieve it.
Noting that expansion of mutual investment would contribute to reciprocal economic growth of both countries, the two leaders agreed to enhance cooperation and support at government level to further strengthen existing bilateral collaboration in infrastructure development.
The involvement in infrastructure projects, particularly in the construction industry, is expected to provide bigger opportunities in investment through joint business and governmental collaboration, the two leaders said.
It is learnt that the microfinance company feels that going to the EGM will only lead to washing of more dirty linen in public. The sacked CEO may also not prefer staying on the board of the company
After unceremoniously sacking its CEO, Suresh Gurumani, the board of directors of SKS Microfinance Limited seem set for a settlement with him rather than take the matter of his sacking to the Extraordinary General Meeting (EGM).
Moneylife learns that at its board meeting on Friday, 22nd October, the SKS Microfinance board is understood to have decided that going to the EGM at this time - as directed by the Andhra Pradesh Court - would only lead to the washing of more dirty linen in public. Our sources say that although SKS's founder Vikram Akula and director Paresh Patel of Sandstone Capital were in favour of sticking to the decision of sacking Mr Gurumani, the other independent directors apparently did not want to precipitate the situation.
Mr Gurumani who attended the meeting, is understood to have left, once the board decided that it would work at an amicable settlement. He is also understood to have said that he is not in favour of continuing in the board. While there are no media reports on the proceedings of the board meetings, Moneylife learns that the board spent a lot of time discussing the Andhra Pradesh Ordinance to regulate microfinance and its possible impact on SKS's business.
On 4th October, the board of the Hyderabad-based company had terminated the services of Mr Gurumani four years ahead of the expiry of his contract and named MR Rao as his successor. Mr Gurumani had a five-year contract from April 1, 2009 to expire on March 31, 2014. The company in its notification to stock exchanges did not attribute any reason to his termination.
Now that the SKS board wants an end to the public spat over his sacking, Gurumani's settlement will, in all probability, be what was being discussed before his sacking: 1.25 lakh stock options and payment of a year's salary (a stunning Rs2 crore a year in a microfinance company). As we had reported earlier, the settlement fell through because Mr Gurumani rejected the many onerous conditions that were included in his severance deal. It was then that the board decided to sack him and has not managed to offer a credible explanation for its actions. A more acceptable new settlement is now being worked out and Mr Gurumani clearly wants to keep quiet until he cashes his cheque.
Mr Gurumani's employment terms apparently specified that if he was terminated 'with cause', he would lose all his stock options. Given this deal, we learn that the company tried to find a 'cause' for sacking. This means that Suresh Gurumani will walk away a very rich man after just two years as head of a company that claims to alleviate the problems of India's unbanked poor.
Meanwhile, as SKS's stock prices continue to tumble and the board grapples with the new Andhra government ordinance, a shareholder told us, "Isn't it amazing that a company which claims to deal with India's poorest and needy persons does not have a single board director who is from among the people it lends to."
Every board member of SKS Microfinance has been with a foreign bank or private equity company with an Ivy League background. It probably explains why the company felt it could get away with sacking a CEO without reason just a couple of months after a major IPO.
Atul Takle, who is in charge of communications at SKS Microfinance has written to us to say: "As you are aware, proceedings of board meetings are privileged information and we would not be able to comment on those."
Interestingly, SKS Microfinance has made no announcement to the stock exchanges about their proposed change of mind and the fact that a settlement in favour of former CEO Suresh Gurumani would involve a big payout at a time when the company is already facing serious issues over the structure of the microfinance business.