A proxy advisory firm has urged the independent directors of Raymond Limited to probe into the allegations against Chairman and Managing Director (CMD) Gautam Singhania made by his estranged wife Nawaz Modi and ask both of them to keep off the Board during the course of the investigation.
"If need be, we expect you to protect the company from its own promoters," said the letter from the Institutional Investor Advisory Services (IiAS). Mukeeta Jhaveri, Ashish Kapadia, Dinesh Lal, K Narsimha Murthy and Shiv Surinder Kumar have been addressed in the letter.
IiAS has also advised the directors to retain an independent legal counsel to protect and "delineate" themselves from the allegations.
Nawaz Modi has accused the Chairman and Managing Director of Raymond, Gautam Singhania, of domestic violence and misusing company funds. "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 wrote in the scaling open letter.
"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."
The advisory firm has listed questions to which the proposed investigation has to answer.
1. Has either director violated the company’s code of conduct and ethics policy, including (but not limited to) moral turpitude?
2. Is there a possibility of criminal liabilities on the company or any of its directors?
3. Are the actions of either director in consonance with the company’s brand? Alternatively, can their actions be disassociated from the brand?
4. If there is merit in the allegations of CEO excesses, what controls will you put in place to arrest any further slippages?
5. Will the impending divorce and these allegations remain a distraction for the Chairman and Managing Director? If so, then having an interim CEO will support unhindered operations of the company, at least until the divorce settlement is done and that there are no further distractions to discharging the role.
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