Probe Nawaz Modi's assault allegations against Gautam Singhania: IiAS urges Raymond's independent directors

Proxy advisory firm Institutional Investor Advisory Services (IIAS) on Tuesday urged the independent directors of textile company Raymond Ltd to launch an investigation into the allegations of assault made against its managing director Gautam Singhania by his estranged wife.

Last week, Nawaz Modi Singhania, also a board member at Raymond, alleged that she and her daughter were physically assaulted by Singhania in September 2023.

She alleged that she was "beat up, smashed, and kicked" by her husband. She also claimed that Gautam Singhania, Raymond Group MD, "punched" his minor daughter Niharika for about 15 minutes.

"The first incident happened on the 10th of September morning where Gautam beat up, smashed up, kicked, punched his minor daughter Niharika and myself for something which felt like about 15 minutes...unrelentingly," she claimed in an exclusive conversation with India Today.

CNBC TV 18 reported that Singhania has written to the company's board of the company assuring smooth functioning of business amid the ongoing separation with his wife.

Raymond's shares fell on Tuesday for a tenth straight session and have lost over 16% since November 10. The share slump started on November 13, when Singhania announced separation from his wife on social media platform X (formerly Twitter).

On Tuesday, Raymond's scrip on BSE closed trading 4.3% lower at Rs 1,578.75.

IiAS said in an open letter that the independent directors need to communicate with investors and other stakeholders, assuage their concerns and "articulate a course of action they have taken following these public allegations".

"In the interest of the company and safeguard the interests of a larger set of stakeholders, we urge you to undertake an independent investigation into the allegations of both, assault and CEO excesses," IiAS said.

Gautam Singhania announced his separation from Nawaz Modi Singhania on November 13, following which she asked for 75 per cent of his $1.4-billion personal wealth for herself and their two daughters.

The advisory firm stated that the company has an experienced leadership and is in the process of succession for key roles. “Given the leadership depth, we are sure you will be able to find an interim CEO from within the ranks, who can take over from Gautam Singhania for the duration of the investigation,” said IiAS.

"Will the impending divorce and these allegations remain a distraction for the Chairman and Managing Director? If so, then having an interim CEO will support unhindered operations of the company, at least until the divorce settlement is done and that there are no further distractions to discharging the role," said IiAS.

"Your resolute actions in the current situation will be etched in corporate history; these will provide guidance to future boards on handling promoters in trying situations. While we wish for such circumstances never to repeat, we also wish for boards to have the fortitude to handle them objectively," added IiAS.

Meanwhile, on Monday, Singhania has allayed fears among the firm's board of directors and employees and said it's "business as usual" despite strife on domestic front.

"I am steadfast to create and deliver value to all our shareholders and ensure the interests of our employees, customers, and other stakeholders," he said in an email which was accessed by CNBC TV18.

"Media is rife with news about matters pertaining to my personal life. Writing to you to say that I have chosen not to comment on the same, maintaining dignity of my family is paramount to me. I remain resolute as CMD and fully committed towards the smooth functioning of the company and its business. Even in these difficult times for me, I assure you that at Raymond, it is business as usual. I am steadfast to create and deliver value to all our shareholders and ensure the interests of our employees, customers, and other stakeholders. We have made significant strides towards growing our businesses exponentially.

"Had our best quarter in history on top of a consistent upswing in performance over the last 9 quarters. Almost doubled our engineering business by entering sunrise sectors of aerospace, defense, electric vehicle components through Maini Precision Products Limited's (MPPL) acquisition. We have been awarded two marquee real estate projects in our focus market of Mumbai Metropolitan Region," said the Raymond CMD in the internal mail.