As the battle for control of Gildan continues, the Montreal clothing manufacturer released new information on Tuesday about the conduct of its former CEO Glenn Chamandy, including his relations with shareholders who are calling for his reinstatement at the helm.
The board of directors alleges that Glenn Chamandy, who was fired last month, failed to disclose that he had invested in funds managed by an institutional shareholder of Gildan who wants to see him become CEO again. The name of this shareholder is not specified.
“A member of this shareholder’s senior management has purchased a multi-million dollar property at Apes Hills, the private golf resort owned by Glenn Chamandy in Barbados,” the statement said.
“Glenn Chamandy also appears to have a close relationship with Browning West, the activist hedge fund that is currently leading the aggressive and misleading campaign to reinstate Glenn Chamandy as CEO,” it said.
“Glenn Chamandy was a featured speaker at the hedge fund’s investor day last February and, although Browning West has been an investor in Gildan for several years, Glenn Chamandy appears to have treated Browning West differently from other Gildan shareholders. . »
The board of directors points out, for example, that on November 8, a week after Glenn Chamandy proposed his acquisition plan deemed high risk to the board and urged the latter to keep him in position as CEO, Glenn Chamandy hosted Browning West co-founders Usman Nabi and Peter Lee, along with a number of Browning West investors, for an exclusive tour of Gildan’s manufacturing facilities in Honduras.
The company says it has no recent information indicating that any other Gildan shareholder and its investors were received by the CEO for an exclusive tour of Gildan facilities.
Criticism of Chamandy
Furthermore, the company says it has now learned that in addition to rarely showing up at the office, holding few meetings with members of senior management and never deigning to visit Gildan’s newest manufacturing plant ( located in Bangladesh), Glenn Chamandy only sent a few professional emails per day on average and few work meetings were scheduled on his calendar.
Still according to Gildan, Glenn Chamandy sent a letter to the board on November 25 issuing an ultimatum aimed at approving a multi-billion dollar acquisition strategy and a succession plan. “The next day, even before the council responded, Glenn Chamandy had already begun to leave his office,” the company said.
Last week, Browning West called for a special meeting of shareholders to vote on the return of former CEO Glenn Chamandy and reconstitute the majority of Gildan’s board of directors. This American shareholder claiming to hold an approximate 5% stake in Gildan also claimed to have learned that the board was considering using extreme tactics, including postponing the next annual meeting of shareholders and any requested special meeting until the fall.
Gildan said Tuesday that Browning West’s claim was false and that the company would respond to the meeting request in a timely manner.
Opposition to dismissal
For the past month, around ten independent institutional shareholders, controlling approximately 35% of Gildan’s shares, have publicly expressed their opposition to the dismissal of Glenn Chamandy.
Glenn Chamandy’s successor at the helm of Gildan, Vince Tyra, officially took office this week, a month earlier than initially planned.
It was not immediately possible to get a reaction from Glenn Chamandy, but Browning West told The Press that the board’s “increasingly desperate messages in the face of unprecedented shareholder reaction fail to distract from substantial shareholder concerns.” »
“Through our understanding of the operational complexity of Gildan’s manufacturing process, we know that Vincent Tyra – who lacks manufacturing experience and has a history of destroying value – is an extremely poor choice. It has probably become clear to all shareholders that the board is much more focused on self-preservation than on accepting shareholder views and creating value. »
Glenn Chamandy was removed as CEO on December 10. The board justified its decision by differences related to the succession plan and by emphasizing that Glenn Chamandy wanted to move forward with a risky multi-billion dollar acquisition strategy.
Gildan shares are listed on the Toronto Stock Exchange and the New York Stock Exchange. The current stock price gives the company a value in excess of CA$7 billion.