SKS Microfinance fires CEO...stock slides

Shares of SKS Microfinance fell after the Company's Board of Directors terminated the appointment of Suresh Gurumani as Managing Director and Chief Executive Officer. The board also withdrew all powers and authorities granted to him or otherwise enjoyed by him in the Company as Managing Director and CEO of the Company, with immediate effect. The Board also appointed M. R. Rao, Deputy CEO as the Managing Director & CEO for a period of three years w.e.f. October 04, 2010, subject to the completion of necessary statutory and other procedure.



Reports also said that the Securities and Exchange Board of India (SEBI) has asked SKS Microfinance to spell out the reasons behind its decision to sack Gurumani. According to a business daily, SKS Microfinance was also told to disclose whether it was earlier aware of any events or circumstances that could have resulted in Gurumani's exit. A SEBI letter, addressed to the compliance head of SKS Microfinance, asks the company if there were any developments warranting the dismissal of Gurumani between the time SKS Microfinance filed the DRHP, for its equity issue and the allotment of shares.

SEBI also asked SKS to explain why one of its independent directors, Ashish Lakhanpal, had stepped down from the board. The Hyderabad-based microfinance firm debuted on the bourses on August 16 at Rs1,036, a 5.18% premium over the IPO price of Rs985. On that day, the stock had ended at Rs1,088.58.