'Step off the Board...': IiAS urges Raymond shareholders to vote against Gautam Singhania's reappointment

Institutional Investor Advisory Services (IiAS) has called on shareholders of Raymond to vote against the reappointment of Gautam Hari Singhania to the board at the company's annual general meeting on June 27. The advisory firm reportedly cited unresolved divorce issues and allegations of domestic violence and misuse of company funds by Singhania, brought forth by his estranged spouse Nawaz Modi, as key reasons for their recommendation.

IiAS has recommended that both Singhania and Nawaz Modi be kept away from the board until these matters are resolved and the results of an independent investigation are made public. "Until the time 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."

Despite these concerns, Raymond's board has proposed Singhania’s reappointment for another five-year term.

"The board has not provided an update since their last statement in December 2023, and it remains unclear if an independent investigation into these accusations has been pursued," IiAS reportedly stated. The advisory firm emphasized that shareholders need to protect the company from internal disputes among its promoters.

IiAS also highlighted concerns about Singhania’s proposed remuneration, which they believe is excessive for the size of the business and not in line with industry peers. The proposed pay structure from July 2024 to June 2027 could exceed regulatory limits, with potential earnings around Rs 35 crore based on fiscal year 2024 profits, significantly higher than the regulator’s cap.

In a letter dated November 28, 2023, IiAS urged Raymond's independent directors to investigate the allegations against Singhania and to have both him and Nawaz Modi step off the board during the investigation. The letter stressed the importance of protecting the company from its own promoters if necessary.

Nawaz Modi has accused Singhania of domestic violence and misusing company funds. IiAS criticized the board's silence on these serious accusations, noting that it has caused significant concern among investors, reflected in a notable decline in Raymond's stock price.