Independent directors of Raymond should undertake probe into allegations of assault, CEO excesses: Advisory firm

New Delhi, Nov 28: “Your actions must protect the company from what proposes to be a long-drawn acrimonious battle between Nawaz Modi and Gautam Singhania,” corporate governance advisory firm, Institutional Investor Advisory Services India Limited (IiAS) has written in a letter to independent directors of Raymond Limited.

The letter has been addressed to independent directors, Mukeeta Jhaveri, Ashish Kapadia, Dinesh Lal, K. Narsimha Murthy and Shiv Surinder Kumar

As per media reports, Nawaz Modi, a board member, alleged that she and her daughter were physically assaulted by Gautam Singhania, the company’s Chairman and Managing Director, at JK House (company property) in September.

She has also alleged that company funds were being used for Gautam Singhania’s personal benefit (CEO excesses) – and that she was acting as a whistle-blower of sorts.

“Despite such serious and heinous accusations by one board member against another, you have been silent. Investors are worried, which is reflected in the significant erosion in stock price over the past few days. Your silence can be misconstrued – surely you don’t want stakeholders thinking that these accusations are to be tolerated,” IIAS said.

“At the very least, as Independent Directors, you need to communicate with investors and other stakeholders – assuage their concerns and articulate a course of action that you 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.

"Your legal counsel and the firm undertaking the independent investigation must neither currently be nor have previously been associated with the Raymond group of companies or connected with the Singhania family,” it added.

“For the duration of this investigation, you must consider asking both, Nawaz Modi and Gautam Singhania, to take time off from their responsibilities as board members. We recognize that asking the promoters to step aside is not easy – but as independent directors you have a fiduciary responsibility towards minority investors, employees and larger set of the company’s stakeholders. Therefore, you will need to dispassionately separate ownership from management,” IIAS said.

“If need be, we expect you to protect the company from its own promoters. We believe that any settlement between the two promoters cannot mean that such behaviour, unless the investigation shows otherwise, be condoned.”