Minority shareholder takes a dig at Raymond

A minority shareholder of Raymond has alleged that the company’s promoters have siphoned off funds from the BSE-listed company for their personal use by buying expensive jets, yachts and constructing a huge mansion in South Mumbai.

In an open letter published on Thursday, the shareholder, Vishal Patel, said the Singhanias did not inform the shareholders about the commercial aspect of the South Mumbai real estate project, which was embroiled in controversy. The company has violated municipal rules while spending ~186.7 crore as on March 31, 2016, on redeveloping the property, Patel said.

When contacted, Raymond did not comment on the issue but few days earlier Chairman Gautam Singhania had tweeted that one Bharat Patel is trying to blackmail the company and he was arrested but received a bail on medical grounds. Bharat Patel and Vishal Patel are related.

Patel said the independent directors turned a blind eye on allowing capital and operating expenses of assets like boats and aircraft which was charged to the company. The company owns boats and yachts worth ~72 crore. It owns aircraft worth ~114 crore. The shareholder said the company had been charged ~133 crore in depreciation in last 9 years for boats and yachts.

Another ~117 crore was charged for depreciation of aircraft in the last 10 years. The Singhanias owns 42 per cent stake in the company. The letter said the auditors should separately disclose this to small shareholders instead of cleverly disguising it as “miscellaneous” expenses.

According to the letter, the company had a net profit of ~197.2 crore in the last 10 years, while in the same period it has charged ~327.8 crore as expenses for the assets and additionally ~56.17 crore was paid as remuneration to the promoters.

Patel said Chairman Gautam Singhania’s salary rose 33.7 percent in the financial year (FY) 2015-16 to ~11.39 crore. “The board of directors owe to the stakeholders an explanation and justification towards the rationale for the above project,” Patel said asking the company to change its registered office from a inaccessible place in Ratnagiri to Mumbai so that small shareholders can attend the company’s annual general meeting.

In an open letter, the shareholder, Vishal Patel, said the Singhanias did not inform the shareholders about the commercial aspect of the South Mumbai real estate project, which was embroiled in controversy