Gildan Activewear says Browning West’s share purchase was ‘illegal’

(Reuters) – Canadian apparel maker Gildan Activewear on Sunday said it has learned that the activist fund Browning West, LP’s purchase of Gildan shares last month violated the U.S. anti-trust laws.

Gildan has alleged that the move was an “illegal” attempt by the U.S.-based fund to reappoint former Chief Executive Glenn Chamandy and eventually take control of Gildan’s board.

It added that Browning violated the U.S. anti-trust law by not notifying the U.S. Federal Trade Commission and U.S. Department of Justice about acquisition of voting securities and failed to comply with mandatory 30-day waiting period.

Under Canadian laws, shareholders can request a special meeting of all shareholders only if they hold more than 5% of stake. “Browning West’s share acquisitions barely put it over this threshold,” Gildan said in a statement.

The statement comes after it said Chamandy failed to disclose ties with shareholder, adding that it appears that the former CEO and co-founder treated Browning West differently than other shareholders.

Browning West, in a separate statement, termed Gildan’s accusations as an attempt to deprive shareholders of an opportunity to reconstitute the board at a validly requisitioned special meeting.

Earlier this month, Browning West escalated its fight with the Gildan board to reinstate Chamandy by seeking to replace a majority of members and requested a special meeting to reconstitute the board.

(Reporting by Shubhendu Deshmukh in Bengaluru; Editing by Rashmi Aich)