Advisory firm against Gautam Singhania's reappointment to Raymond's board

A proxy advisory firm has recommended the shareholders of the leading textile and fabric manufacturer Raymond to vote against the reappointment of Chairman & Managing Director Gautam Singhania on the board of the company.

It has called for an independent investigation into the accusations of domestic violence and misappropriation of funds raised by his estranged wife Nawaz Modi by the board of the company.

Moreover, it has also called for Gautam Singhania and Nawaz Modi to step off the board of Raymond until divorce-related issues are settled and the results of an independent investigation are received.

Besides, the proxy advisory firm IIAS has also recommended Raymond shareholders to vote against the proposed remuneration structure for Singhania claiming that it allows him to be paid in excess of regulatory thresholds.

An e-mail sent to Raymond remained unanswered by the time of filing of the story.

Raymond is conducting its Annual General Meeting on June 27, in which it has proposed for reappointment of Gautam Singhnia on the board of the company for a period of five years from July 1, 2024, to June 20, 2029 and his remuneration for the next three years as CMD.

Over the resolution for the appointment of Singhnia on the board, IIAS pointed out that Singhnia is currently undergoing divorce proceedings and his wife, Nawaz Modi, has accused him of domestic violence.

"She has also publicly alleged that he has used company funds for personal benefits. The board has not issued an update since their last statement in December 2023 and it is unclear if it has sought an independent investigation into these accusations," the report added.

It further added that it is now for the shareholders to shield the company from this intra-promoter dispute.

"We do not support his reappointment to the board," the report said.

While in resolution no 5, Raymond has proposed to reappoint Singhania as Chairperson and Managing Director for five years and fix his remuneration which was in excess of regulatory limits.

On this, the advisory firm said the proposed remuneration is high for the size and complexity of the business, and not comparable to peers.

"The remuneration structure allows for him to be paid in excess of regulatory thresholds, which based on FY24 profits alone, can be in excess of Rs. 350 mn. The board must provide a maximum cap on the remuneration, and not leave it open-ended with significant headroom built in for possible excessive remuneration," it said.

The proxy advisory firm further said it expects the board of Raymond "to run an independent investigation into the accusations of domestic violence and misappropriation of funds raised by Nawaz Modi".

"There are also divorce proceedings taking place for which Gautam Singhania will need to devote time. Until the divorce related issues are settled, and the results of an independent investigation are received, we expect the board to have both directors Gautam Singhania and Nawaz Modi step off the board," it said.