Gautam Singhania faces opposition over Raymond Lifestyle's chairman role

Gautam Singhania’s proposed appointment as executive chairperson of Raymond Lifestyle has drawn sharp criticism from corporate governance watchdogs. Two corporate governance advisory firms, Empowerment Services (SES) and Institutional Investor Advisory Services India (IiAS) have urged shareholders to reject the move, citing concerns over governance, transparency, and reputational risks, according to a report by The Economic Times.

Their recommendations come at a crucial time, when shareholders are currently voting on the proposal, which seeks to formalise Singhania’s role for five years starting September 1, 2024.

SES raises governance concerns under Gautam Singhania
SES highlighted that Singhania’s appointment was announced before receiving formal approval from the company’s board. It also expressed reservations about his simultaneous full-time roles in Raymond and Raymond Lifestyle, the lack of an absolute cap on his variable pay and commission, and unclear restructuring plans. SES maintains that no individual should hold more than one full-time position unless the roles are in closely aligned businesses.

The e-voting process, which started on November 5, will continue until December 4. Shareholders are being asked to approve Singhania’s tenure, which is set to span from September 1, 2024, to August 31, 2029. However, concerns raised by proxy advisory firms have cast a shadow over the proposal.

Raymond Lifestyle, which was separately listed following the demerger of Raymond’s lifestyle business on September 5, opened at Rs 2,850. Since then, its stock has dropped by 28.5 per cent, closing at Rs 2,026 on the BSE on Monday.

IiAS, in its analysis, criticised the lack of detail in the proposed remuneration structure, noting the absence of a maximum cap and performance-linked metrics for commission payouts. The advisory firm also flagged the absence of malus or clawback clauses, making the pay package appear “open-ended.”