‘The board made tremendous efforts to settle with Gurumani’

Insisting that there was no other reason but an interpersonal conflict for Suresh Gurumani’s ouster as the CEO of SKS Microfinance, its founder Vikram Akula said there was no external influence on the board to see Gurumani out of the door. Excerpts:

Why did Suresh Gurumani leave SKS Microfinance?
I really don’t have anything more than what we had said earlier.  It was an issue of interpersonal conflict.

What do you mean by interpersonal conflict?
Two people did not get along. But, the interpersonal issue also means the management and Gurumani too did not get along.

What exactly is the reason for Gurumani’s ouster?
There was an interpersonal conflict between the former MD and the management.

You said there was no financial irregularity. Then is it about misconduct on part of Gurumani?
There was no conduct issue and no financial irregularity. Post IPO, there was an interpersonal conflict between the former MD and the management team that has led to the separation. I am not at liberty to say anything beyond. It was just about an interpersonal issue.

Is it true that you had influenced the board on Gurumani’s ouster?
The board represents the shareholders.

What do you expect MR Rao (the new CEO) to deliver, which Gurumani could not deliver?
Post-IPO there emerged interpersonal conflicts between the former MD and the management team. The board felt that me coming to the executive chair and M R Rao being the new MD, we will able to deliver the best results.

Is the ouster due to your change of decision to take an active role in the company again?
Initially I was the CEO. Then I moved to the non-executive role. Now I am back in the executive chair. I have been in this company in different forms for about 13 years. But, my commitment remained as it is.

Since you maintain the same commitment, what difference does it make whether you were in a non-executive role or otherwise?
I think executive chair has a different responsibility compared to the non-executive chair.

Is it true that you are forcibly assigning a reason to Gurumani’s exit only to ensure that he does not encash his options and there was no other strong reason for the decision?
My understanding is, when an employee separates from the company his options lapse with or without us assigning a cause to it.

What efforts were made by the board to settle the interpersonal issue before deciding to terminate the CEO?
When the board decided to do a separation, the board made tremendous efforts to settle with Gurumani. But that was not successful. I am not at liberty to discuss the details of the settlement.

What is the follow up from Sebi?
Sebi asked us for our response. We followed it and it is yet to come back to us for any further clarification.

When is the EGM to oust Gurumani as the director?
There has been no decision on the EGM as yet.

How do you react to the Andhra Pradesh high court’s order?
We were delighted to see the court vindicating the board decision to terminate the MD. The petitioner asked for stay on the termination and the court did not grant it.

Are you still talking to Gurumani for a settlement?
I am not aware of any current settlement talks.

What is this interpersonal conflict all about?
As a part of running the business, it is about getting a team unified and energised. Interpersonal issues had an impact on all that.

But, don’t you think you had hired Gurumani since he was a senior banker?
Just because something was good earlier, it does not stand good at all the times.

What is your role now and how do you influence the board?
It was about the importance of team. Alignment of team is an important part of the business. We have an extremely strong board. I don’t control the Pramod Bhasins and others on the board. I am there because the board selected me. Maybe they joined the board since they respect and understand what we do in the company. I am not here to say what Pramod Bhasin has to do. I am too small in stature compared to them. Certainly I have a voice in the board and they respect my thoughts.

But do you influence them?
I might influence them based on my argument. I don’t have a single share.

But, don’t you hold shares through the Trust?
The trust’s holding is at about 10.7%. I don’t represent the trust on the board.