SKS Trust Advisors, one of the largest shareholders in SKS Microfinance, has started knocking the doors of Company Law Board (CLB) following the rejection of its board seat in the microlender.
“The process has been initiated with the preparation of paperwork required to move CLB. We are going ahead to fight back for a board seat,'' Biksham Gujja, chairman, SKS Trust, told FE on Wednesday. This comes in the wake of the microlender's rejection of the proposed move to bring back Vikram Akula, founder of SKS Micro, on its board.
In 2011, Akula had to step down as the chairperson of SKS Microfinance, following an alleged conflict with the board members. The company did not allow Akula's re-entry as it felt that its shareholders did not have the right to nominate directors.
Recently, SKS Trust, which holds 12.6%, sold about 1,10,000 shares in SKS Microfinance, close to 0.1% stake, in the open market. The transaction, totalling about R1.7 crore, included SKS Trust Medak selling 41,774 shares valued at R67 lakh and SKS Trust Sangareddy selling 67,000 shares worth R1.07 crore, Gujja, and a close friend of Akula, said.
SKS Trust has also questioned the re-appointment of MR Rao as the company’s MD, claiming that SKS Microfinance did not conduct its annual shareholders' meeting according to regulations. It has written a letter to the Securities and Exchange Board of India (Sebi), alleging irregularities in the proceedings of the AGM.
"It may be of interest to note that one of the special resolutions — item number seven pertaining to ESOPs (employee stock ownership plan) for employees — was defeated while some of the other resolutions, specially item number five relating to the re-appointment of MD, barely scraped through. We believe if the incomplete proxies were precluded from the valid votes as decided by the scrutinisers, the results may well have been different," SKS Trust Advisors wrote in its letter to Sebi.
Further, SKS Trust Advisors alleged the register of proxies was not produced by SKS Microfinance for inspection. “The proxy closure time was not mentioned. The authorisation letters of proxies submitted by five entities — Crown Capital, Kismet SKS, Kumaon, Westbridge and Sandstone — were allegedly not authenticated by the respective authorities,” the letter said.