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)