SKS probes scam by staff under Akula

SKS Microfinance is learnt to be investigating an accounting scam allegedly purported by some of its staff.

Though the quantum of misappropriation and modus operandi are still under wraps, sources said four key employees have been found to be involved in the scam, which dates back to the time when Vikram Akula, the company’s founder, was at the helm of affairs.

According to the sources, the company had either terminated or asked three of the four to leave.

“The fourth employee, who is a senior staffer, had offered to quit after the management detected the irregularity. However, he was not allowed to leave and is being probed in detail,” said a source.
The probe is being carried out by internal teams assigned for the purpose.

An SKS spokesperson confirmed the probe, but said the issue was more about administrative and procedural lapses.

“It does not run into hundreds of crores. The quantum of the irregularity is very minimum. However, we have been working on this since November 2011 and the company has already initiated action against those involved in this,” he said.

The industry has been abuzz with the misdeeds of some agents who have been claiming benami loans from microfinance institutions and re-routing them as private finance to the needy at a higher interest rate.

However, the SKS official insisted that the irregularity detected at the company had nothing to do with the borrowers. “It is purely administrative and procedural in nature and there is nothing that directly connects to the borrowers,” he said.

Sources said the four employees are alleged to have made fictitious or wrong entries in the books of the company, leading to certain pecuniary impact on it.

Meanwhile, in a piece of good news, SKS Microfinance on Monday obtained sanction for assignment of a rated pool of Rs354 crore from a major public sector bank — the largest rated pool

assignment transaction in Indian microfinance history.
SKS has already drawn down the first tranche of Rs78.7 crore, comprising receivables from women borrowers belonging to the weaker sections, as defined by the Reserve Bank of India.

The pool receivables identified are from 18 non-Andhra Pradesh states where SKS operates.

“The pool is well-diversified, with a single branch accounting for less than 1% of the pool, with the average loan amount being Rs10,717. The pool is rated as CARE A1+(SO) (indicating highest safety) by CARE,” the company said in a statement.

Earlier this month, SKS had completed another rated pool assignment transaction for Rs243 crore.