Proxy advisory firm Institutional Investor Advisory Services (IiAS) has asked independent directors of Raymond Ltd to consider appointing an interim CEO and investigate the allegations of assault by its chairman and MD Gautam Singhania on his wife and daughter, and the use of company funds for personal benefit.
In an open letter to the company's five independent directors, IiAS also suggested they ask Singhania and his estranged wife Nawaz Modi, also a board member, to take time off from their responsibilities as board members.
The five independent directors to whom the letter was addressed are Mukeeta Jhaveri, Ashish Kapadia, Dinesh Lal, K Narsimha Murthy, and Shiv Surinder Kumar.
Citing media reports, IiAS said Modi has alleged that she and her daughter were physically assaulted by Singhania in September 2023.
She also alleged that company funds were being used for 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 proxy advisory firm wrote to the independent directors.
It further said, "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."
Asking the independent directors to "protect the company from what proposes to be a long-drawn acrimonious battle between the Nawaz Modi and Gautam Singhania", IiaS said, "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."
The firm further said asking the promoters to step aside is not easy but reminded the independent directors of their fiduciary responsibility towards minority investors, employees and larger set of the company's stakeholders.
"Therefore, you will need to dispassionately separate ownership from management," it said, adding, "We also note that the company has initiated a succession planning process for key roles.
"Given the leadership depth, we are sure you will be able to find an interim CEO from within the ranks, who can take over from Gautam Singhania for the duration of the investigation."
IiAS also sought to know from the independent directors if there is a possibility of criminal liabilities on the company or any of its directors and "if there is merit in the allegations of CEO excesses, what controls will you put in place to arrest any further slippages?"
Asking if the impending divorce and the allegations remain a distraction for the CMD, IiAS said, "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."
On Monday, Singhania assured employees and board members that it is "business as usual" in the company and he is fully committed towards its smooth functioning.
In an internal mail to the employees and the board members of Raymond, Singhania who announced separation from his wife Nawaz earlier this month, said he has chosen not to comment on the reports in media "about matters pertaining to my personal life", saying, "maintaining the dignity of my family is paramount to me".
"However, I remain resolute as chairman & managing director and am fully committed towards the smooth functioning of the company and its business.
"Even in these difficult times for me, I assure you that at Raymond it is business as usual," he asserted in his mail.
Earlier this month, Singhania announced that he has separated from his wife Nawaz, amid speculation over the future of their 32-year relationship.
The billionaire industrialist, whose net worth is reported to be over Rs 11,000 crore, made the announcement on the microblogging platform X, saying it was not the same Diwali as in the past.
The industrialist, who is helming the multi-decade group having roots in textiles and branched out into newer ones like real estate, said Nawaz, a fitness trainer.
The couple has two children and Singhania said they grew together in their years of companionship and were a source of strength for each other.