Raymond independent directors hire lawyer to protect minority shareholders

Company's interests 'paramount consideration', they say as fight between chairman Gautam Singhania and his estranged wife pulls down market value

Independent directors of Raymond have appointed Berjis Desai, senior independent legal counsel, for advising the directors on the family feud between Chairman Gautam Singhania and his estranged wife Nawaz Modi.

In a statement, the independent directors have assured the stakeholders that they would act dispassionately and not take sides. Currently, there are five independent directors on the board. Desai has no links with the promoters or the company.

“The paramount consideration will always be the interests of the company as a whole and its non-promoter shareholders. Any material development or remedial measures, which impact the company, shall be forthwith communicated in a spirit of complete transparency,” the directors said.

The independent directors have been meeting and monitoring the situation so far as it affects the company and the minority shareholders. They reiterated their commitment to protect the interests of non-promoter minority shareholders, employees and other stakeholders, the statement said.

The directors are alert to ensure that the matrimonial disputes between the two promoter directors do not affect the capacity of the chairman and managing director to manage the affairs and business of the company, the statement said.

“However, it may be appreciated that neither any law nor any corporate governance standard requires IDs to enquire into, investigate, or delve into the merits or otherwise, of such matrimonial disputes, which lie beyond the remit of the ID. The ID shall continue to exercise utmost vigilance in watching the evolving situation and shall not hesitate to proactively initiate measures, the moment required, to protect the interests of all stakeholders,” the statement said.

Raymond has lost significant market valuation since November 13 after Singhania announced separation from wife Nawaz, who is a director on the board.

The Singhania family owns half the company’s shares, which have lost value since the separation news.

In a media interview, Nawaz alleged corporate governance lapses in the company. She said that in a board meeting on November 8 she had raised a few issues regarding alleged misuse of company funds.

The eight-member board has five independent directors apart from Singhania, Nawaz, and SL Pokharna, group president.

Nawaz did not reply to queries sent by Business Standard.

When contacted, Singhania said, “In the interest of my two sweetheart daughters and to respect my family’s dignity, I will refrain from offering any comment.” Nawaz also alleged Singhania was trying to remove her from the board after she protested at the gate of the Raymond factory in Thane on Diwali eve when she was denied entry to a company function.