Gildan Activewear Inc. head office is seen in Montreal, Monday, Dec. 11, 2023. The board of directors at Gildan says Glenn Chamandy had no credible long-term strategy for the company and a campaign by shareholders to have him reinstated as chief executive is misguided. THE CANADIAN PRESS/Christinne Muschi

MONTREAL - The board of directors at Gildan Activewear Inc. says its ousted CEO had no credible long-term strategy for the company and a campaign by shareholders to have him reinstated as chief executive is misguided.

In an open letter to shareholders, the board said Monday that Gildan co-founder Glenn Chamandy was the right leader for much of his tenure but that it had lost trust and confidence in his ability to grow an increasingly complex organization.

"The board is unanimous in its conviction that retaining Mr. Chamandy as CEO would have jeopardized the future of Gildan and destroyed shareholder value," the board said.

"Mr. Chamandy has attempted to frame this as a dispute over the board’s CEO succession process. That is not what this is about. This is about the future of Gildan."

The board said Chamandy had become more disengaged as CEO in recent years as he pursued personal projects including the development of a golf resort in Barbados.

Gildan's board replaced Chamandy late last year with former Fruit of the Loom executive Vince Tyra. Chamandy has said he was terminated without cause after four decades with the company.

The letter from the board is the latest salvo in a fight over who should lead the clothing manufacturer.

U.S. investment firm Browning West said late last year that it would seek a special meeting of shareholders so that it could replace five directors at Gildan, appoint Michael Kneeland as chair and reinstate Chamandy as chief executive.

The move by Browning West has been backed by other large Gildan's shareholders including Jarislowsky Fraser, Turtle Creek Asset Management Inc. and Oakcliff Capital.

Turtle Creek said it interpreted Gildan's Monday remarks as further evidence that the company has "lost touch with the shareholders they have been elected to represent."

"Rather than spending time crafting an ever-changing narrative around their ill-conceived termination of Mr. Chamandy, Turtle Creek urges the board to swiftly call a special meeting that will allow all shareholders’ voices to be heard," spokesperson Riyaz Lalani said in a statement.

It its letter to shareholders, Browning West said the board has ignored the independent feedback of nine separate investors who collectively hold more than 35 per cent of Gildan's outstanding shares.

"Each of these investors has publicly vocalized their concerns about the board’s handling of succession and called for the reinstatement of Mr. Chamandy," the firm wrote.

This report by The Canadian Press was first published Jan. 8, 2024.

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