Raymond today said proxy advisory firm IiAS’ report on the move to sell its premium property ‘JK House’ in Mumbai to its promoters and their extended family is based on incorrect and incomplete information, and not understood in correct manner. Yesterday, IiAS in a report claimed sale of JK House to Raymond’s promoters and their extended family will result in loss of over Rs 650 crore for the company and its shareholders.
Following the IiAS warning, Raymond stock came under huge selling pressure, plunging nearly 10 per cent in early trading session yesterday. The stock later recovered the losses.
Raymond Chairman & Managing Director Gautam Hari Singhania said, the company is committed to protect interest of all its shareholders and is taking all appropriate steps, including legal measures, towards this objective.
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“As also mentioned in the notice, 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,” he added.
IiAS in its report said that in its forthcoming AGM on 5 June 2017, Raymond has presented a resolution to make an offer to sell its premium real estate at throw-away rates to its promoters and their extended family.
“Should this transaction go through, IiAS estimates that it will result in an opportunity loss of over Rs 650 crore for the company and its shareholders,” it added.
JK House is located at Breach Candy, Mumbai.
The report also alleged that the company’s board has failed to protect the interests of the minority shareholders.
“From the perspective of transparency and good governance, the board has failed in discharging its fiduciary responsibilities towards shareholders. The quality of board oversight at Raymond is of concern if the board is unable to separate the interests of the company and its promoters,” IiAS said.
It also questioned fairness of the company’s audit committee, whose members include Vijaypat Singhania, a direct beneficiary of the transaction. Shares of Raymond were trading 4.37 per cent higher at Rs 709.90 on BSE.