SKS Microfinance executive chairman Vikram Akula stepped down Wednesday from the company he founded, the board said, as India's second largest microlender struggles to revive its flagging fortunes.
SKS shares have plunged over 90 percent since the company went public in 2010.
SKS spokesman J.S. Sai said the resignation was voluntary, answering widespread reports that Akula was forced out in a power and personality struggle with the board.
Akula clashed with investors over how to revive the company, said one person close to the talks who spoke on condition of anonymity because of the sensitivity of the matter. Akula didn't want to pull SKS away from its core business of making small loans and transform it into a broad-based rural financial services company _ a strategy some investors thought would help them recoup their investment more quickly, the person said.
The company's changing fortunes showcase the difficulty of meeting the expectations of investors and the needs of poor borrowers.
Akula transformed SKS into one of the sector's biggest for-profit companies. He attracted investment from George Soros and N.R. Narayana Murthy, a founder of Infosys and one of India's most respected corporate leaders, as well as from venture capitalists Sandstone Capital and WestBridge _ formerly part of Sequoia Capital _ both of which have executives on the board.
Investors greeted SKS's August 2010 initial public offering with huge enthusiasm, driving the stock price up to 1,402 rupees a share _ a valuation some say reflected unrealistic expectations about financial returns.
Meanwhile industry stalwarts _ including Grameen Bank founder Muhammad Yunus _ pointed to SKS as a symbol of an industry that was becoming irresponsibly pro-profit and losing its focus on serving the poor.
Akula, and others, have long maintained that capital markets are the only way to meet the massive demand for small loans, which is estimated at $100 billion to $150 billion in India alone.
If SKS does diversify into other financial services, regulatory issues may make it harder for the company to get loans from commercial banks in India.
P.H. Ravikumar will take over as interim non-executive chairman. Ravikumar helped set up ICICI Bank, India's largest private bank, and has been on the SKS board for five years. Akula, who founded SKS as a nonprofit in 1997, will remain as a consultant until March 2012 to ease the transition.
Akula could not be reached for comment.