MUMBAI: Vikram Akula, the poster boy of micro-lending in India, has given up the battle to re-establish his presence in SKS Microfinance BSE -4.68 % - the company he had founded but was forced to quit amid differences with senior managers and some shareholders.
SKS Trust Advisors - the original promoters of SKS Microfinance, an entity close to Akula - has decided to sell its 12.5% equity stake in the country's only listed micro-lending company, two sources familiar with the development told ET.
SKS Trust Advisors has hired Adharaya Financial Advisors, a low-key Mumbai-based investment bank, to find a buyer for the stake sale. While SKS Trust Advisors is the registered owner of the shares, the beneficial ownership of the equity bloc lies with five mutual benefit trusts (MBTs) underlying SKS Trust. Akula is the settlor of SKS NGO and has certain say in the appointment of trustees in the MBTs. The head of SKS Trust Advisors, Bikshamaiah Gujja, a well-known social scientist, could not be contacted. A Trust spokesman declined to comment on the subject. The Trust's decision to sell its holding marks the end of a chapter in SKS Microfinance, which has gone through several ups and downs - the recognition of a viable lending model under Akula, a successful IPO, controversies following political backing to errant borrowers, Akula's exit on a bitter note, losses suffered by the company, the Trust's subsequent efforts to re-enter the board, and now, finally, its decision to offload the stake.
"The Trust has chosen to take a different path and let the SKS management pursue the course it has taken. The organisation thinks it's time to bury the past... I don't believe the Trust has any obligation to sell the stake. It has asked Adharaya Financial to explore the possibility over the next one month," said a source.
Meanwhile, SKS Microfinance, under CEO MR Rao and chief financial officer S Dilli Raj, has cleaned up its books by writing off bad loans and staging a turnaround. The company has been recording net profit for six quarters.
It's widely perceived the proceeds from the proposed stake sale could be used by the Trust to pursue micro-lending or similar activities related to financial inclusion that interest Akula, Gujja and others associated with the Trust