Disputes with Spandana Sphoorty resolved, says ex-MD of microfinance firm after truce

Padmaja, however, did not disclose more on the terms of the settlement as she said that the agreement (with the Spandana board) has a confidentiality clause.

Published: 25th June 2022 06:03 PM  |   Last Updated: 25th June 2022 06:03 PM   |  A+A-

microfinance

The gross loan portfolio of the microfinance sector in India rose by 10 per cent to Rs 2.85 trillion this year. (Express Illustrations)

Express News Service

NEW DELHI: After the board of the Microfinance firm Spandana Sphoorthy Financial Ltd and its former MD Padmaja Reddy called a truce, the former MD told The New Indian Express that all disputes have been resolved and the parties have cleared their dues to each other.

Padmaja, however, did not disclose more on the terms of the settlement as she said that the agreement (with the Spandana board) has a confidentiality clause.

Padmaja, who is also the founder of Spandana, got into a public spat with the board after she was made to leave the post of the managing director in November 2021.

Before stepping down, she had told employees of the group that she wanted to continue as the MD of the company but the board was not in favour of her.

Spandana Sphoorty in a press statement on Thursday said that the company and Ms Reddy have resolved their differences and agreed to part ways on amicable terms.

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In the press statement, the company admitted that after Padmaja Reddy's resignation from her position as the managing director of the Company on 2 November 2021, certain disputes arose between Reddy and the Board of Directors of the Company.

PE firm Kedaara Capital and its affiliates hold 45.5% in the Hyderabad-based microfinance company.

After her forced departure from the company in November, Padmaja had objected to the board's decision to raise Rs 300 crore by issuing preferential shares to Kedaara Capital and Valiant Mauritius Partners in February this year.

She had said that the company did not need equity and if at all a need for funds arose it should have been raised through rights issue and not preferential shares. She had also raised questions on the pricing of the preferential issue.

In a conciliatory statement issued by Spandana, it has said that while Padmaja Reddy is no longer serving as the managing director of the Company, she continues to be a substantial shareholder and member of the Company's Board, and that she continues to remain a well-wisher of Spandana.



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