An attempted rebellion is taking shape at Gildan, where two other major shareholders – including the company’s largest – are supporting an offensive aimed at ejecting directors of the Montreal clothing manufacturer and handing over co-founder Glenn Chamandy, fired last month, to the orders.

After several tumultuous weeks, Montreal asset manager Jarislowsky Fraser and Toronto firm Turtle Creek, which respectively hold 7.2% and 3.3% of the multinational’s outstanding shares, also believe that the time has come to decide on a once and for all to find out who should run the company that owns brands like American Apparel and Peds.

“We believe that Gildan shareholders have lost confidence in the board of directors,” explained the Toronto firm on Thursday. Rapid resolution is essential to avoid any further loss of value. We cannot recall a situation where shareholder opposition to a board of directors’ decision was so significant and rapid. »

This “rapid resolution” will likely take the form of a special meeting of shareholders. Los Angeles-based Browning West, which owns 5% of Gildan, says it is finalizing the “technical details” to require such a meeting. The American activist fund wants to remove 5 of Gildan’s 11 board members in order to replace them with its own candidates, including Mr. Chamandy. The latter would also once again become president and CEO, a position he had held for two decades.

Jarislowsky Fraser and Turtle Creek intend to support the American activist fund team unveiled on December 29. In a written statement sent to La Presse, the Montreal manager limited himself to saying that he supported Browning West. He did not shoot any new arrows at the board of directors of the multinational based in Montreal.

Between them, Jarislowsky Fraser, Browning West and Turtle Creek own some 15.5% of Gildan’s outstanding shares.

This governance crisis erupted when Mr. Chamandy was dismissed by the board of directors on December 10. Occurring the next day, the announcement surprised investors, who were not expecting it. The board justified its decision by citing differences with Mr. Chamandy regarding the succession plan and by maintaining that the latter wanted to move forward with an acquisition strategy considered too risky.

In principle, Vince Tyra, who notably led Fruit of the Loom during his career, is to become the new president and CEO effective February 12. Whether this will happen remains to be seen. In recent weeks, nine of Gildan’s largest shareholders, who together own about 35% of the outstanding shares, have publicly criticized the board while calling for the return of Mr. Chamandy – who is still resentful of having been dismissed and wishes to return to office.

“We are faced with a strategy rarely used by shareholders in Canada,” underlines Ivan Tchotourian, full professor at the Faculty of Law at Laval University specializing in business law, governance and social responsibility. It is a form of rebellion. It is certain that this will disrupt the routine of the board of directors and the company. »

At the time of writing, the clothing manufacturer had not responded to La Presse’s questions sent by email. Since the announcement of Mr. Chamandy’s dismissal, Gildan’s stock has fallen about 15% on the Toronto Stock Exchange.

As of Thursday, Browning West had not yet formally requested Gildan to hold a special meeting of shareholders. It could take several weeks, even months, before an appointment is held, according to experts consulted by La Presse. This type of confrontation will certainly leave its mark, believes the director of the Institute on the Governance of Public and Private Organizations (IGOPP), François Dauphin.

“We open the door to an offensive on both sides,” underlines the expert. We are in a period of significant crisis. It surprises me that we want to force the holding of an extraordinary meeting when the annual meeting of Gildan shareholders is generally held [at the beginning of] May. Usually, we would opt for a proxy battle instead. »

Obviously, dissatisfied shareholders want to move as quickly as possible. In its release Thursday, Turtle Creek urged Gildan’s board not to “engage in delay tactics with respect to the date of the special meeting.”

MM. Tchotourian and Dauphin are nevertheless surprised by the vigor with which the co-founder of Gildan is trying to overturn the decision of the board of directors, which was unanimous, underline the two experts.

“I can understand shareholders being surprised, but the succession plan and the long-term strategy are two elements at the heart of a board of directors’ priorities,” summarizes Mr. Tchotourian. If the board was not satisfied with these aspects, it seems to have assumed its responsibilities, which consist of looking after the interests of the company. »

Brothers Glenn and Greg Chamandy founded Gildan in 1984. The clothing maker gave up its multiple voting shares in the early 2000s when Glenn succeeded his brother Greg as CEO.

“[Glenn] Chamandy still seems to act like a controlling shareholder,” says Dauphin. This frequently happens with a founding shareholder who has been in place for a long time. »

Mr. Tchotourian says it is always difficult for “managers and founders” to hear that they “may no longer be the right person” to run the company.

On the Bay Street trading floor Thursday, Gildan shares fell 38 cents, or 0.9 percent, to close at $42.91. This gives it a market value of 7.4 billion.