A minority shareholder has written to market regulator Securities & Exchange Board of India (SEBI) seeking a probe into the motives behind Gautam Hari Singhania, chairman & managing director of Raymond Ltd., seeking shareholders’ approval for allotment of four duplex apartments at JK House in Mumbai to members of the promoters’ family.
In his letter, minority shareholder Vishal Ashwin Patel asked SEBI ‘not to fall prey to Mr. Singhania’s deceitful act’ and take the ‘strongest possible action’.
Responding to the allegations, a Raymond Ltd. spokesperson said, “Mr. Gautam Singhania has expressed his views on the matter and has taken a firm and decisive stand putting forth his clear intent to protect shareholders’ interests ahead of family and has assured that the company is taking all appropriate measures to safeguard stakeholders.”
Raymond has proposed a resolution approving an agreement entered into in 2007 by the company with Gautam Singhania, his father Vijaypat Singhania, aunt Vennadevi and cousin Akshaypath for registration of duplex flats at JK House. These individuals were earlier staying in duplex flats which were owned by the company. On the grounds that the building was structurally weak and require redevelopment, the company entered into agreements whereby they were given an option to purchase equivalent area in the new building at ₹9,200 per sq. ft. inclusive of stamp duty.
The AGM is scheduled on Monday at Raigad where the proposal will be put to vote. Mr. Singhania has stated that, personally, he would like shareholders to vote against the resolution.
‘Why now?’
“I am wondering why all of a sudden the promoter is trying to turn over a new leaf by pretending to adhere to the highest standards of transparency and good governance,” Mr. Patel has said in the letter, a copy of which is with The Hindu .
“All these years, he (Gautam Singhania) had kept shareholders and regulators in the dark by not uttering a single word about the unethical agreement entered into by the company with members of the Singhania family to sell valuable real estate in Mumbai at ₹9,200 per sq.ft,” said the letter.
Another minority shareholder Bharat Patel, a relative of Vishal Patel, said, “Gautam Singhania was a director when the tripartite agreement was entered into. Not a single time in nine years did he ever remember tripartite agreement. He kept all shareholders in the dark and is now trying to use shareholders once again to settle scores with other family members which, in turn, results in valuable assets of the company [being] dragged into legal tangle.”
“Had he thought...[on behalf of] shareholders, he would not have spent more than ₹90,000 per sq.ft. in construction while there was an agreement to give option to family members at ₹9,200 per sq. ft,” said Mr. Bharat Patel whose family holds 1% stake in Raymond.
