New SKS chief barred from taking major decisions

October 9th, 2010 - 9:12 pm ICT by IANS  

Hyderabad, Oct 9 (IANS) The Andhra Pradesh High Court has barred the new chief executive of SKS Microfinance from taking any major decisions before the conclusion of a case related to the controversial sacking of his predecessor Suresh Gurumani.

Gurumani, who was sacked little less than two months after SKS — one of the country’s largest microfinance firms — made a stupendous stock market debut, listing at a market capitalisation exceeding Rs.8,000 crore.

A group of SKS shareholders approached the high court seeking remedial action.

A high court bench of Justice G. Bhavani Prasad passed an interim order asking the company to retain Gurumani on its board of directors till further orders and restrained newly appointed chief executive and managing director M.R.Rao from taking any major policy decisions.

SKS is the country’s largest microfinance company, which gives small loans to entrepreneurs, and raised Rs.1,653 crore through a recently concluded initial public offering (IPO).

The SKS scrip has fallen over 9.3 percent to Rs.1,228.25 from its previous weekly close. It had closed last Friday at Rs.1,355.20.

The market regulator, Securities and Exchange Board of India (SEBI), earlier this week had asked SKS if the sacking of Gurumani was planned earlier than the company’s IPO hit the market, questioning the timing of his dismissal.

A SKS microfinance spokesperson said it had already answered the query from SEBI, but refused to divulge any details.

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