The former boss of Gildan, Glenn Chamandy, says he is “offended” by the allegations from the board of directors of the Montreal company, which accuses him of being an “ineffective” and “disengaged” manager.
“I am offended by what appears to be a premeditated effort to publicly undermine my record and, what is even worse from a corporate perspective, is that the board’s negligent behavior also tarnishes the reputation of a great company,” said Mr. Chamandy in a statement sent to the media.
In a letter sent to shareholders Monday, directors of the clothing manufacturing company accused its founder of being an “ineffective” manager, as part of a shareholder fight to determine who should run the Montreal company.
“The board has gradually lost confidence in Mr. Chamandy,” we read in the letter to shareholders. It became clear that he had no credible long-term strategy or vision for the future. »
The board of directors fired Mr. Chamandy at the end of last year and replaced him with Vince Tyra.
The decision created a wave of discontent among major shareholders, including the American firm Browning West and the Montreal asset manager Jarislowsky Fraser.
Browning West also reiterated its request on Tuesday to hold a special meeting of shareholders. The firm is now requesting the replacement of 8 of the 11 members of the board of directors, rather than 5.
Before Monday, the board of directors explained its decision by a disagreement over the company’s succession plan. He also felt that the former leader of Gildan was not the best candidate to carry out the strategic plan.
In its letter on Monday, the council went even further in its allegations against Mr. Chamandy. He claimed the former executive was “disengaged” with the company.
“His management style was unstructured, he held few meetings with senior management and rarely showed up in the office, on average only a few days a month, even long after the COVID lockdown ended , we can read in the missive. Mr. Chamandy never visited Gildan’s new manufacturing plant in Bangladesh, one of our most important investments. »
Write-offs and restructurings
According to the council, Mr. Chamandy was simply not the man for the job. “In the absence of a coherent long-term strategy, Mr. Chamandy moved from one opportunistic strategy to another. It made forays into branded products, retail distribution, international expansion and yarn production, which met with mixed success, resulting in an eight-year annual revenue growth rate of less than 1% and, during this period, write-offs and restructurings of more than $450 million. »
The letter stated that the board and the founder had agreed as early as December 2021 to establish a succession plan. Mr. Chamandy, however, reportedly expressed his desire to stay last fall.
Mr. Chamandy would have “presented to the board a plan aimed at carrying out risky and highly dilutive acquisitions worth several billion dollars, arguing that he would then have to remain CEO for several years to supervise the integration,” wrote the advice.
“The board had doubts about these high-risk acquisitions, particularly due to Mr. Chamandy’s inability to answer the most basic questions regarding his strategic proposal,” the company continues.
Mr. Chamandy rejected this version of the facts on Tuesday. “Contrary to the board’s claims, the long-term plan presented on October 30, 2023 showed significant organic growth prospects for Gildan over the next five years and was supported by our management team. »
“The board’s regrettable actions have resulted in a massive loss of shareholder value. This destructive action plan is counterproductive, and all efforts should be redirected towards growth that benefits all stakeholders in society, a priority that has always been at the heart of Gildan’s values,” denounces Mr. Chamandy .
Later Tuesday, Gildan confirmed receipt of the letter from Browning West. “The Board of Directors continues to view the efforts of Browning West and Mr. Chamandy as baseless public disinformation tactics,” Gildan spokesperson Geneviève Gosselin said in an email to the English service of La Canadian Press.
“As previously stated, the board is independently reviewing Mr. Chamandy’s engagement with certain shareholders prior to his termination. »
Gildan shares fell 29 cents, or 0.69%, to $41.78 on the Toronto Stock Exchange Tuesday morning.