MicrofinanceFocus, August 18, 2011: SKS microfinance has suggested Vikram Akula to step down as executive chairman of the company.  Vikram Akula may lose the company he launched in 1998, according to Economic Times report.

The reason provided by SKS is that they feel since Akula has to travel frequently, it is difficult for him to devote time as a full-time executive. Instead, Akula should contribute by using his experience and understanding to guide the company in a non-executive or part-time chairman.

Akula, sources said, has recently approached AZB, a leading law firm in Mumbai, to explore possible legal options if the board eventually decides to turn against him.

The change of leadership is no surprise to SKS microfinance. First, there was the termination of Suresh Gurumani, Managing Director and Chief Executive Officer of SKS microfinance. M.R. Rao has been appointed his position.

SKS microfinance, the only listed MFI in the country, went through a crisis when the Andhra Pradesh state passed a regulation. In October last year, the Andhra Pradesh government introduced a new law to ban unfair debt collection practices and prevent borrower suicides and trauma.

SKS executive chairman Vikram Akula remarked, “There was an external political attack on microfinance that culminated into draconian provisions of a microfinance law passed in Andhra Pradesh, the Andhra Pradesh MFI Act.” The Act has resulted in a slight reduction, up to 5 percent, in the company’s growth, the report said.