Family Affair

Raymond's investors grapple with uncertainty as a dispute between CMD Gautam Singhania and his estranged wife Nawaz Modi plays out in the open

- KRISHNA GOPALAN

THE LAST FEW weeks have not been easy for Gautam Singhania, the 58-year-old Chairman and Managing Director of Raymond. A very public spat between him and his now estranged wife, Nawaz Modi Singhania, has not gone down well with the stock market, sparking a 14 per cent fall in share prices in November.

The family battle has a professional angle, since Nawaz Modi is a non-executive director of Raymond. Singhania has requested privacy, but there are concerns.

A recent note by proxy advisory firm Institutional Investor Advisory Services asks how "private" the lives of listed company CEOS ought to be. "A CEO's divorce can affect the company in many ways. First, a divorce may impact the CEO's efficiency. There is a growing body of work that suggests that family conflict often spills onto the workplace," it said. Then, there is the impact on ownership, where a CEO holding a substantial ownership stake in a company "may need to sell or transfer a portion of this stake to meet the conditions outlined in a divorce settlement." Per reports, Nawaz Modi has sought 75 per cent of Singhania's wealth, estimated at $1.4 billion.

The firm's independent directors, meanwhile, have hired legal counsel and have assured shareholders that they will protect the interests of all stakeholders.