Former Gildan Activewear Inc. CEO Glenn Chamandy responds to questions during a news conference in Montreal, on Feb. 5, 2015.Paul Chiasson/The Canadian Press
Former Gildan Activewear Inc. GIL-T chief executive Glenn Chamandy has investments in funds managed by Toronto’s Turtle Creek Asset Management Inc., a Bay Street investment firm pushing with several other Gildan shareholders to bring him back as CEO.
Mr. Chamandy, whose shocking dismissal last month has triggered an intense battle between Gildan’s board and major investors over who should run the Canadian T-shirt maker, has an unspecified sum invested with Turtle Creek, which he confirmed.
The former CEO said the investment in Turtle Creek runs through a family office as well as a private foundation bearing the Chamandy name. He declined to specify the amount, saying he’s been fortunate enough to have amassed significant wealth during the course of his career because of Gildan’s success.
“I am not an investor in Turtle Creek itself,” Mr. Chamandy said via e-mail Monday. “However, the team responsible for my asset management and that of the charitable foundation has, over time, allocated varying minor percentages of assets under management to Turtle Creek-managed funds on a strictly passive basis.”
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Turtle Creek is just one of numerous discretionary asset managers selected by the team from time to time as part of an overall asset allocation strategy and process, Mr. Chamandy said. “To the best of my knowledge, Turtle Creek manages in excess of $5-billion for a large number and wide variety of clients, which would render those allocations immaterial to it,” he said.
A separate source said Mr. Chamandy has no role in the foundation and family office’s day-to-day operations and that an independent team of advisers makes decisions concerning the investments they hold. The Globe and Mail is not identifying the person because they were not authorized to speak about private matters.
In a news release last week, Gildan’s board took aim at Mr. Chamandy’s faltering leadership while CEO as well as his ties to investors, alleging that he has “at least one undisclosed relationship” with a shareholder now demanding he be rehired. A senior executive of that shareholder also purchased a multimillion-dollar property at Apes Hill, the private golf resort in Barbados owned by Mr. Chamandy, Gildan said.
The company did not name the investor. It’s now understood to be Turtle Creek. A spokesman for Turtle Creek declined to comment.
Turtle Creek is among nine dissident investors holding an estimated 35 per cent of Gildan’s stock that have called publicly for Mr. Chamandy’s return. The board says that won’t happen. Neither side shows signs of backing down.
Gildan directors say they gradually lost trust and confidence in Mr. Chamandy and that his actions and lack of transparency with the board are proof the company needed new leadership. Vince Tyra, a former executive at Fruit of the Loom, started earlier this month as his replacement.
The board has been going through Mr. Chamandy’s electronic messages and files to shed light on what it calls his “questionable behaviour” around the time he was let go Dec.10. It says the then-CEO recorded a private and confidential phone call in November with the chairman without the chair’s knowledge and also deleted messages on corporate-issued devices.
In a statement last Wednesday, Mr. Chamandy blasted the board for pursuing “a strategy seemingly aimed at undermining my reputation and my record through insinuation and distortion of the truth.”
Directors have said they’re unanimous that Mr. Chamandy’s continued employment would have jeopardized the company’s future. Shareholders including U.S. hedge fund Browning West LP and Montreal investment management firm Jarislowsky Fraser say Mr. Chamandy has delivered in spades for investors over the years and want him back.
Browning West has filed a formal request with Gildan to hold a special shareholders meeting and vote in a new board. Gildan has yet to formally respond to that request but on the weekend, it challenged the validity of Browning’s recent purchases of Gildan shares giving it the right to make that request. Browning says the claims are bogus and amount to little more than stalling tactics by the Gildan board.
In a letter Monday to Gildan’s board and unrelated to Mr. Chamandy’s investment, Turtle Creek urged Gildan directors to call a special meeting immediately: “Your current destructive PR campaign of inferences and innuendo is, quite frankly, embarrassing to the company and to each of you,” it said. “For the sake of each of your reputations, and for the sake of the company, we urge you to end it.”
Mr. Tyra, who’s been CEO for just days now, started a month early in order to engage with key stakeholders and bring needed stability and leadership to Gildan, the company says. He’ll need to gain the confidence of shareholders quickly so that when the vote comes to elect the next Gildan board, they’ll support directors who want to keep him on, according to Robert McFarlane, a corporate governance expert and former finance chief at Telus.
Mr. McFarlane said the new CEO only has a few months to make a difference. “That’s not a lot of time.”