Raymond Ltd. said it was committed to protecting the interest of all its shareholders in relation to the company’s plan to sell premium property at ‘JK House’ in Mumbai to its promoters.
Reacting to a report from proxy advisory firm Institutional Investors Advisory Services (IiAS) and news reports it termed “media specualtion” based on incorrect information, Raymond in a filing to the BSE on Friday said, “Needless to say, the promoters, being interested parties, will abstain from voting on this matter.”
In a report titled ‘Raymond: The Complete Rip-Off’ IiAS had advised shareholders to vote against the resolution on the proposed sale of property, arguing that the move would result in a loss of more than ₹650 crore for the company and its shareholders.
“Should this transaction go through, IiAS estimates that it will result in an opportunity loss of more than ₹6.5 billion for the company and its shareholders. IiAS recommends voting against this transaction. In our opinion, the board has failed to protect the interests of the minority shareholders. The company and its directors must prepare themselves for shareholders seeking recompense,” the advisory wrote in the report.
‘JK House’ is a recently rebuilt building located at Breach Candy, one of the most expensive real-estate locations in Mumbai. Raymond’s annual general meeting is scheduled to be held on June 5.
Discounted rate
According to IiAS, Raymond’s own valuation report states that the residential property is valued at ₹1,17,000 per square foot (built up), putting a value on the entire transaction at ₹7,100 crore.
Raymond, however, proposes to sell the property to the Singhania family factions for ₹9,200 per square foot of carpet area — a more than 90% discount to market rates, according to IiAS.
In an e-mail, Raymond’s chairman & managing director Gautam Hari Singhania said, “I assure you that the company is committed to and is taking all appropriate steps, including legal measures, towards” protecting investors’ interest.
“The company will raise all defences in the legal proceedings that have been initiated and will undertake all steps to protect and preserve the property of the company,” Mr. Singhania wrote.
