Glenn Chamandy is hitting back.

The ousted former CEO of Top 40 supplier Gildan (asi/56842) released a statement this week that accuses the vertically integrated apparel manufacturer’s board of directors of waging a smear campaign against him that’s “false, defamatory and misleading” – all in an effort to quell uproar among activist investors that want Chamandy returned as chief executive officer.

“In response to (investor) protests, the board willfully and abusively decided to orchestrate and perpetuate a systematic plan to undermine my reputation, credibility and character, even though it was their unilateral decision to terminate me on a without-cause-basis in the first place,” Chamandy asserted.

The Battle So Far

The board of Montreal-headquartered Gildan fired Chamandy, the publicly traded firm’s co-founder and CEO, in December. They replaced him with veteran executive Vince Tyra, who began work at Gildan on Jan. 15.

There’s been an investor revolt since Chamandy’s canning. Investors that hold approximately 35% of Gildan’s outstanding shares reportedly want a special meeting where a vote would be taken on a plan spearheaded by investment firm Browning West that calls for Chamandy to be reinstated as CEO and as a board director. The proposal also seeks to replace eight board members.

The board and Chamandy/Browning West have been in a highly public dispute amid all the rancor, releasing statements with regularity that pan their opponents in the heavyweight corporate fight.

Gildan’s Board Says Activist Investor Illegally Bought Shares In Plan to Control the Company https://t.co/4JZM1Ioufd

— Chris Ruvo (@ChrisR_ASI) January 22, 2024

This week alone, the board accused Browning West of illegally acquiring shares in Gildan, while intimating that Chamandy gave the hedge fund preferential treatment.

Then it published another statement in which it provided a timeline regarding Chamandy’s dismissal – a statement that, in part, eviscerated the former CEO, characterizing him as an ineffective, disengaged, word-breaking, reactionary leader desperate to cling to power despite having what directors said was no clear vision for Gildan’s future.

“It was Mr. Chamandy who proposed a risky, multibillion-dollar acquisitions strategy, backed by no serious analysis,” the board said. “It was Mr. Chamandy who gave the board ultimatums. It was Mr. Chamandy who threatened to leave, but in the end, would not agree to a negotiated retirement or resignation, forcing the board to terminate him. It was Mr. Chamandy who attempted to create chaos at Gildan by misleading investors regarding both the timing and reasons for his termination.”

Chamandy: 'Board Has Gone Rogue'

Chamandy responded in kind with a public statement of his own.

For starters, he pointed out that the board never took umbrage with his performance when he was with Gildan – with his compensation and public disclosures by the directors reflecting that his performance was excellent. Indeed, Chamandy said he took great efforts to understand Gildan at all levels from the ground up, and to constantly chart paths to growth.

“In the past four years alone,” Chamandy said, Gildan’s “earnings per share increased by 87%, adjusted operating margins increased to 20% from 14%, and net sales increased by 15%. This strong financial position has delivered consistent buybacks and dividends to shareholders, which delivered in excess of $1.3 billion to shareholders over the past four years. Note that this period included the COVID-19 pandemic and two hurricanes impacting our operations in Honduras.”

Chamandy said he never, as the board asserted, gave an ultimatum that centered on him staying as CEO to lead proposed acquisitions. In October, he presented a long-range planning proposal that was prepared by Gildan management for the board – a typical part of the annual strategic planning process.

“Sadly, I am but one of many victims of the board’s rogue behavior and value-destroying actions. Gildan’s employees, customers and shareholders are now facing an uncertain future because of it.” Glenn Chamandy

The report detailed organic growth initiatives, innovations in products and more. Potential “inorganic” (read acquisition) options were reviewed, “which we do every year,” said Chamandy, but “there was never any engagement with inorganic options, and there was never any ultimatum regarding such options.” To say otherwise is “not facts,” he added.

The board had also claimed Chamandy gave Browning West preferential treatment by treating leaders from the firm to a special visit to the company’s plant in Honduras in November. Total malarkey, according to Chamandy.

He said Gildan’s investor relations team arranged the visit and never concealed it from the board. Chamandy didn’t “host” the visit as the board alleged; in fact, he said, he initially wasn’t even expected to be present for it. The visit was formally logged by the investor relations team in the plant’s logbook – nothing secretive or hidden. And, it’s not the only such time investors have visited, as board members have suggested, Chamandy stated.

“Similar tours of the facility in Honduras had been arranged by the company’s investor relations team for other shareholders, including Coliseum Capital Management LLC, as recently as in June 2023,” said Chamandy, who characterized the board’s attempt to cast the Browning West visit in a suspicious light as underhanded tactics in a perception war aimed at turning investors against him.

“Sadly, I am but one of many victims of the board’s rogue behavior and value-destroying actions,” Chamandy said. “Gildan’s employees, customers and shareholders are now facing an uncertain future because of it.”

Board Releases Report on CEO Succession Process

Browning West and other investors have criticized Gildan’s board for what they felt was a rash, business-devaluing decision to terminate Chamandy. The board has said the process was, in fact, years in the making and well-considered.

The directors paid a corporate governance expert, Richard W. Leblanc, to conduct what they said was an independent report on the succession process. The results of that study were released Jan. 24 and showed that Gildan “followed a good and rigorous process with respect to succession planning.”

The board did this, according to the report, by holding regular meetings on CEO transition, considering internal candidates, and using professional legal, compensatory and search firms to identify strong external candidates.

According to the board, the report said directors thoroughly reviewed, assessed and diligently deliberated upon internal and external candidates. Directors proceeded “iteratively, methodically, deliberatively, and without undue influence or bias, at all stages of the CEO hire process,” the board said the report found.

Tyra, who the board ultimately hired as Chamandy’s successor, is off to “an impressive start as CEO,” directors said. “He is meeting with employees, customers and investors and will be visiting Gildan locations. Mr. Tyra is bringing the stability and thoughtful leadership that Gildan and investors demand as we move forward with confidence and optimism.”

Chamandy co-founded Gildan in the 1980s and was CEO for 20 years. He remains keen to return.

“The facts are that my family and I established Gildan Activewear with a vision to offer outstanding customer value, positively impact our communities and deliver enduring shareholder value,” Chamandy said. “Today, Gildan is a world-class, low-cost, vertically integrated manufacturing company – a Canadian leader with almost 30 facilities worldwide that sells its products across the globe…The board seems to be intent on destroying that legacy.”