Vikram Akula has served a legal notice to SKS Microfinance, the company he founded in 1997 and in which he served as executive chairman till November. The notice seeks a refund of the money paid towards exercising 906,734 stock options, people familiar with the development said, requesting anonymity. Akula is believed to have paid Rs 4 crore towards the exercise of these shares.
The stock options are part of the compensation for Akula’s service to the company between 2007 and 2011. Akula, once the poster boy of the country’s microfinance sector, resigned from his position in SKS in November because of the growing rift between him and the company’s management. Howe-ver, before he resigned, he had sent a notice to SKS on October 14, seeking to exercise his stock options.
“The company is in receipt of the notice of exercise from Vikram Akula for 906,734 options vested in his name, pursuant to SKS Microfinance Employee Stock Option Plan- 2007. Subject to completion of all appropriate post-exercise actions to the satisfaction of the company, including receipt of requisite amounts towards tax obligations considered appropriate by the company, the company shall allot 906,734 equity shares to the grantee,” SKS had said in a notice to the Bombay Stock Exchange last year. The micro-lender, however, did not allot the shares to Akula, as he did not complete the “post-exercise actions to the satisfaction of the company.”
On December 7, Akula withdrew his notice of exercising the stock options.
In the legal notice to SKS, the strike price of Akula’s options is Rs 49.77 a share — the price reported in the company’s annual shareholders’ meet last year. The share price at the close of trading yesterday was Rs 136.45. So, Akula would have to forego around Rs 7.8 crore for withdrawing his notice of exercising stock options.
But the company had not accepted the withdrawal of notice, even though 10 weeks have passed. Sources said this had prompted Akula to send the legal notice earlier this week. “I am legally advised that I am not in a position to discuss, comment on, or respond to your queries. Consequently, I am unable to reply,” Akula said in an e-mailed response.
An SKS Microfinance spokesperson told Business Standard, “The shares were not issued to Vikram Akula, as he had not paid the amount of tax payable thereon. After the company and Vikram Akula entered into an agreement following his resignation, Akula has tried to withdraw his exercise notice. While Akula’s reasons are best known to him, the company is obliged to note that the attempted withdrawal came at a time when the company’s share prices were falling. Therefore, the company has to review all legal, corporate governance and other aspects to determine whether it is permissible and appropriate for the company to accept Akula’s attempted withdrawal. As far as the company is concerned, its rights and obligations related to ESOPs (employee stock-ownership plan) have nothing to do with the approval granted by its shareholders to the change of its objects.”
Akula was not given any severance package. The company had signed certain agreements related to “confidentiality and non-compete” when he resigned. He is expected to launch a new mobile banking initiative and remain involved with the “microfinance industry at a policy level”.
