Proxy Advisory Firm IiAS Urges Independent Board Members of Raymond to Take Action
Gautam Singhania, the charismatic chairman and managing director of Raymond, finds himself embroiled in controversy once again. This time, the company’s stock has taken a hit following a public dispute with his wife, Nawaz Modi Singhania. Raymond’s shares plummeted by 15% in November after a video surfaced showing Nawaz Modi Singhania sitting outside the gates of JK House, alleging she was barred from entering.
Singhania’s Reassurances
Singhania attempted to reassure the board that it was business as usual in a letter, asserting his commitment to the company’s smooth operation while reaffirming his position as Chairman and MD. However, investors remain skeptical despite his assurances.
Intervention by Proxy Advisory Firm
In response to the escalating situation, Institutional Investor Advisory Services (IiAS), a proxy advisory firm, penned an open letter to Raymond’s five independent board members: Mukeeta Jhaveri, Ashish Kapadia, Dinesh Lal, K Narsimha Murthy, and Shiv Surinder Kumar. The letter addressed the serious allegations made by Nawaz Modi Singhania against Gautam Singhania, including physical assault and misuse of company funds for personal gain.
Call to Action
IiAS urged the independent directors to break their silence and address investors’ concerns promptly. They emphasized the need for transparency and accountability, especially in the wake of such serious accusations. The advisory firm suggested that independent directors should engage with stakeholders, reassure them, and outline a plan of action in response to the allegations.
Independent Investigation
To safeguard the company’s interests and ensure impartiality, IiAS recommended conducting an independent investigation into the allegations of assault and CEO excesses. As part of this process, the firm proposed asking both parties, Nawaz Modi and Gautam Singhania, to step away from their board responsibilities temporarily.
Fiduciary Responsibility
Recognizing the sensitivity of the situation, IiAS acknowledged the difficulty in requesting promoters to step aside but emphasized the directors’ fiduciary duty to minority investors and employees. They underscored the importance of separating ownership from management to protect the company’s integrity and stakeholders’ interests.
Key Questions for Consideration
As part of their inquiry, IiAS posed four crucial questions to the independent directors:
- Have either director violated the company’s code of conduct and ethics policy?
- Is there a risk of criminal liabilities for the company or its directors?
- Do the actions of either director align with the company’s brand values?
- What measures will be implemented to prevent future breaches, and how will ongoing distractions affect the company’s operations?
Conclusion
As Raymond navigates this turbulent period, IiAS urged the independent directors to prioritize transparency, accountability, and the company’s long-term stability. By taking decisive action and conducting a thorough investigation, they aim to uphold corporate governance standards and restore investor confidence in Raymond’s leadership.
