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June 19, 2024

Advisory Firm Urges Shareholders to Oppose Gautam Singhania’s Reappointment to Raymond’s Board

A prominent proxy advisory firm has advised shareholders of Raymond Ltd., the renowned textile and fabric manufacturer, to vote against the reappointment of Chairman and Managing Director Gautam Singhania to the company’s board. This recommendation comes in light of serious allegations of domestic violence and fund misappropriation raised by Singhania’s estranged wife, Nawaz Modi.

The advisory firm, Institutional Investor Advisory Services (IIAS), has called for an independent investigation into these accusations. It has also recommended that both Gautam Singhania and Nawaz Modi step down from the board until the divorce proceedings are resolved and the investigation is concluded.

IIAS’s concerns extend beyond the personal allegations. The firm has also advised shareholders to reject the proposed remuneration structure for Singhania, arguing that it allows for compensation exceeding regulatory limits. The advisory firm emphasized that the proposed pay is disproportionate to the size and complexity of Raymond’s business and is not aligned with industry standards.

Raymond’s Annual General Meeting (AGM) on June 27 is set to discuss Singhania’s reappointment to the board for a five-year term starting July 1, 2024, and his remuneration for the next three years as CMD. However, the IIAS report highlights that Singhania is currently embroiled in divorce proceedings, with Nawaz Modi accusing him of domestic violence and misuse of company funds for personal gain. Despite these allegations, the board has not provided any updates since December 2023, nor is it clear if an independent investigation has been initiated.

“We do not support his reappointment to the board,” IIAS stated. The firm believes that shareholders must act to protect Raymond from the fallout of this intra-promoter conflict.

In its detailed report, IIAS critiqued Resolution No. 5, which proposes Singhania’s reappointment and the fixing of his remuneration. The advisory firm pointed out that the proposed pay package is significantly higher than regulatory thresholds, potentially exceeding Rs. 350 million based on FY24 profits alone. IIAS insisted that the board should impose a maximum cap on the remuneration to prevent excessive compensation.

Furthermore, IIAS stressed the necessity for an independent investigation into the accusations leveled by Nawaz Modi. They asserted that until the divorce-related issues are settled and the investigation results are disclosed, both Singhania and Modi should step away from their roles on the board to ensure corporate governance and protect the company’s interests.

As of the time of this report, Raymond had not responded to queries regarding these recommendations. The outcome of the AGM and the decisions made by the shareholders will significantly impact the company’s leadership and governance.

The call for transparency and accountability from IIAS underscores the need for Raymond’s board to address these serious allegations comprehensively. The proxy advisory firm’s recommendations highlight the broader implications of personal disputes on corporate governance and the importance of maintaining stringent oversight to safeguard the interests of all stakeholders involved.

Read more Business related news on R9 News
Jhumpa Lahiri

Jhumpa Lahiri

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