Gildan Activewear Inc.'s shareholders are intensifying their calls to have the company's former chief executive reinstated by asking for changes to be made to the board too.
U.S. investment firm Browning West said in a letter sent to the Montreal apparel company's board Wednesday that it's prepared to seek board changes if the company does not reinstate Glenn Chamandy as chief executive.
Browning West, which holds a 4.8 per cent stake in Gildan, also urged the board to remove Donald Berg as chair and appoint Browning West co-founder Peter Lee as a shareholder representative.
Shareholder Turtle Creek Asset Management Inc. also sought change Wednesday, saying in its own letter that it is "so disturbed by the board’s actions and its conduct that we now believe a significant reconstitution of the board is essential."
The investment management company, which financial markets data firm Refinitiv says had a roughly 3.3 per cent stake in Gildan at the end of September, said it is prepared to use "all means available" to change the board and halt its "continued destruction of value."
Jarislowsky Fraser Ltd., Gildan's largest shareholder, and Anson Funds have also called for Chamandy's reinstatement.
The letters come as Gildan and several of its shareholders have been locked in a disagreement about the company's leadership for roughly a week.
The tension between the two sides stems from an announcement Gildan made earlier in the month revealing Chamandy would be replaced by outsider Vince Tyra. Chamandy said he was terminated without cause after four decades with the company.
For its part, Gildan's board said Wednesday that the decision to remove Chamandy and replace him with Tyra came after Chamandy allegedly moved to pursue "high-risk and highly dilutive multi-billion-dollar acquisitions that would shift Gildan away from its core area of manufacturing experience."
The board also charged that Chamandy agreed to a succession timeline only to later ask to stay on beyond the original plan.
In a letter to shareholders, Berg, along with the board's committee chairs, wrote that the board's trust and confidence in Chamandy had eroded as it worked to hold him accountable for delivering the next chapter of the company’s long-term growth.
"The board is disappointed in Mr. Chamandy’s attempts to inflict the maximum amount of disruption to Gildan’s business in order to remain as CEO," the letter said.
Chamandy, who did not respond to request for comment, has accused Gildan's board of creating "a sideshow to distract from the reaction the shareholders have had with respect to the board's handling of succession planning, in which I was not involved."
"I did not and could not orchestrate or control the events; the board conducted the process," he said.
For Chamandy, Gildan is family business. It was begun by his grandfather in 1946 under the name Harley Inc. In 1982, Glenn Chamandy and his brother took over and revitalized the brand.
This report by The Canadian Press was first published Dec. 20, 2023.
Companies in this story: (TSX:GIL)
Tara Deschamps, The Canadian Press
