Protect Raymond Group from a long-drawn battle: IIAS

In instances of allegations and disputes, Independent Directors must separate ownership from management

- Hetal Dalal, President & Chief Operating Officer, IIAS

Mumbai: Independent Directors need to communicate with investors and other stakeholders on the ongoing Raymond family dispute, says the open letter written by IIAS, a proxy advisor, to all the independent advisors of Raymond Group.

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

Talking to Bizz Buzz, Hetal Dalal, President & Chief Operating Officer, IIAS says, “In instances of allegations and disputes, Independent Directors must separate ownership from management.”

Sometimes, one of the challenges of their role is to act to protect the company from its own promoters, she added.

In media reports published last week, Nawaz Modi Singhania (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 also alleges 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, the open letter says.

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. Your actions must protect the company from what proposes to be a long-drawn acrimonious battle between the Nawaz Modi and Gautam Singhania, it goes on.

To protect yourselves and delineate yourselves from the allegations, you may wish to retain independent legal counsel, it adds.

In the interest of the company and safeguard the interests of a larger set of stakeholders, IIAS has urged the independent directors of the group to undertake an independent investigation into the allegations of both, assault and CEO excesses.

IIAS has said that the Independent directors’ 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.