SKS Microfinance says its shareholders have no right to nominate directors

NEW DELHI: With its ousted founder Vikram Akula attempting to script a comeback, SKS Microfinance today said none of its shareholders have any right to nominate a director on the company board.

"The company states that under its Articles of Association, no shareholder has any right to nominate a director," SKS Microfinance said in a statement.

All requests for appointment as director are required to be made in accordance with the Companies Act and the Articles of Association of the company and will be processed in accordance with law, it said.

Earlier this week, SKS Trusts -- the company's largest shareholder with 12.6 per cent stake -- demanded that Vikram Akula to be inducted on the Board of SKS Microfinance Ltd, the country's only listed micro lender.

Akula, the founder and ex-chairman of SKS Microfinance, was given an unceremonious exit from the company in November 2011 following the Andhra Pradesh micro finance crisis.

SKS Trusts has five mutual benefit trusts whose beneficiaries are self-help groups of borrowers of SKS Microfinance Ltd.

In a letter to the micro finance lender, Biksham Gujja, Chairperson of the trustee of SKS Trusts, said that it has recently become the largest shareholder with 12.6 per cent shareholding, and reiterated its long-standing request for suitable representation on the Board.

The company, it said, has received request for a seat on the board of directors from SKS Trust Advisors Private Ltd, Trustee of SKS Mutual Benefit Trust-Medak, SKS Mutual Benefit Trust -- Sadasivapet, SKS Mutual Benefit Trust - Sangareddy, SKS Mutual Benefit Trust -- Jogipet and SKS Mutual Benefit Trust -- Narayankhed, shareholder of the company.