New Delhi: Independent directors of Raymond Limited should ask the company’s promoters to step down following serious allegations against chairman and managing director Gautam Singhania, proxy advisory firm Institutional Investor Advisory Services India Limited (IiAS) said.
In an open letter to the independent directors of the company, the company asked them to allay the concerns of the investors and other stakeholders, to probe the allegations against the promoters and to protect the company.
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“Despite such serious and disgusting accusations from one board member against another, you remained silent… Your silence can be misunderstood – surely you do not want stakeholders to think that these accusations are tolerable. At the very least, as Independent Directors, you must communicate with investors and other stakeholders β allay their concerns and articulate action you have taken following these public allegations,β the IiAS letter said.
Seeking an independent investigation into the allegations of both, assaults and CEO excesses, the letter said: “During the duration of this investigation, you should consider asking both Nawaz Modi and Gautam Singhania to take time off from their responsibilities as board members. We recognize that asking the promoters to step aside is not easy – but as independent directors, you have a fiduciary responsibility to minority investors, employees and a larger set of the company’s stakeholders. Therefore, you must dispassionately separate ownership from management.”
Earlier in the month, Singhania announced his separation from his wife, Nawaz Modi Singhania, also a board member, through social media posts.
Nawaz Modi reportedly demanded 75% of his $1.4 billion net worth for herself and her daughters as a settlement. She accused Singhania of assaulting her and her daughter. She also alleged that Singhania used company funds for personal benefits (chief executives).
The proxy advisory firm also believes that the group has experienced leadership with extensive industry experience to take control and steer the ship of the group away from the realm of such accusations reflected in the significant erosion in share price over the last few days. They also asked the independent directors to answer some questions about the long-term interests of the company and its stakeholders.
Singhania, meanwhile, assured his employees and board members of the company’s “smooth running” amid the public spat between him and his estranged wife Nawaz Modi.
In an internal communication to his employees last week, Singhania wrote, “Since the media is ripe with news about matters related to my personal life, I am writing to you to say that I have chosen not to comment as well as to preserve the dignity of my family is most important to me. However, I remain resolute as Chairman and Managing Director and am fully committed to the smooth running of the company and its business. Even in these difficult times for me, I assure you that it is business as usual at Raymond. ” Mint saw a copy of the mail.
Notably, Raymond’s shares fell for the tenth consecutive day on Tuesday. The scrip settled at βΉ1,578.75 apiece on the BSE, down 4.27% from the previous day’s close.
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Updated: 28 Nov 2023, 17:25 IST
(tagsTo Translate)Gautam Singhania