Would vote against JK House sale plan: Raymond's Gautam Singhania

Interest of shareholders and company paramount, Raymond chief says

In a rare case of a promoter wanting to defeat a resolution brought by his company, Raymond Chairman and Managing Director Gautam Hari Singhania said he would want to vote against the company's plan to sell off flats in a South Mumbai building at throwaway prices. 

On Monday, Raymond shareholders will vote on the proposal to sell four duplex flats in JK House, located in Mumbai's posh Breach Candy road, to four Singhania family entities, including Gautam. The flats are proposed to be sold at Rs 9,200 per square feet, at a fraction of prevailing market rates.

"Needless to say, as a related party, I am required to abstain from voting on this resolution. However, my personal opinion would be to vote against the resolution in the interest of the shareholders and the company," Singhania said in an early morning press release on Friday. 

The deal has drawn the ire of corporate governance experts and brought to fore the legal battle between Gautam, his father Vijaypat Singhania and his cousins Akshaypat Singhania and Anant Singhania.

Seeking to bust speculations about the deal, Gautam said that the tripartite agreement – entered in 2007 between the company, lessor, and occupants, all of whom were related parties, to offer apartments for sale at a substantial discount to the current prevailing market prices – would cause a major loss to the company and shareholders. 

"Keeping this in mind, the company decided not to act on this agreement. As a result, three of the related parties to this agreement have initiated legal action against the company for implementation of this agreement," he added.

The audit committee and board of directors took a considered view "based on legal advise and in pursuance of best corporate governance practices and transparency". It decided that the matter should be placed before the shareholders after disclosing all relevant facts, for considered decision making. 

"As communicated earlier by me, protecting shareholders' interest is of paramount importance to me and we will continue to take every possible step, including legally contesting the claims on the property from related parties, based on legal advise," Gautam said in the release.