Proxy advisory firm Institutional Investor Advisory Services (IiAS) has urged Raymond shareholders to vote against the re-election of Gautam Singhania as the chairman and managing director (CMD), ahead of the firm’s annual general meeting scheduled on June 27.

IiAS suggested that Raymond’s board of directors remove Singhania, along with his estranged wife Nawaz Modi, from their positions until their divorce proceedings are completed. Singhania has been on the board of Raymond since April 1, 1990.

“Until the time the divorce related issues are settled, and the results of an independent investigation are received, we expect the board to have both directors, Gautam Singhania and Nawaz Modi, step off the board,” IiAS has said.

The proxy advisory firm has also recommended Raymond shareholders to vote against the proposed remuneration structure for Singhania claiming that it allows him to be paid in excess of regulatory thresholds.

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Raymond has proposed reappointment of Singahnia on the board of the company for a period of five years from July 1, 2024, to June 20, 2029 and his remuneration for the next three years as CMD.

IiAS has pointed out that Singhania is currently undergoing divorce proceedings and his wife, Nawaz Modi, has accused him of domestic violence.

“She has also publicly alleged that he has used company funds for personal benefits. The board has not issued an update since their last statement in December 2023 and it is unclear if it has sought an independent investigation into these accusations,” it said.

IiAS has that it is now for the shareholders to shield the company from this intra-promoter dispute.

On Singhania’s remuneration, IiAS has said that it’s too high for the size of the business, and was not comparable to peers.

“The remuneration structure allows for him to be paid in excess of regulatory thresholds, which based on FY24 profits alone, can be in excess of Rs 35 crore. The board must provide a maximum cap on the remuneration, and not leave it open-ended with significant headroom built in for possible excessive remuneration,” IiAS has said.