VG Siddhartha missing: 5 things you must know about Cafe Coffee Day owner - from tax raids, Mindtree to Coca-Cola
To the shock and dismay of his family and the wider business world and all the aficionados who frequented his retail cafes, popular coffee chain Cafe Coffee Day owner VG Siddhartha has suddenly disappeared! Tragically, speculation is rife on social media platforms with the police even hinting that the CCD founder might have jumped into the Netravati River near Mangaluru on Monday evening where he was last seen by his driver.
To the shock and dismay of his family and the wider business world and all the aficionados who frequented his retail cafes, popular coffee chain Cafe Coffee Day owner VG Siddhartha has suddenly disappeared! Tragically, speculation is rife on social media platforms with the police even hinting that the CCD founder might have jumped into the Netravati River near Mangaluru on Monday evening where he was last seen by his driver. Siddhartha, who is the son-in-law of former Karnataka CM SM Krishna, has also written a letter to the CCD Board of Directors saying that he fought for long but finally gave up. Dakshina Kannada Police has launched a frantic search to look for the prominent Karnataka-based businessman. But, who is VG Siddhartha and how did he form the vast coffee chain? Here are 5 things you must know about him -
1. VG Siddhartha was born in Chikmagalur district of Karnataka and his family is been in the business of coffee plantation for around 140 years. He earned a Masters from the Mangalore University and joined JM Financial Limited in 1983-1984 in Mumbai as a management trainee/intern in Portfolio Management and securities trading.
2. After two years, Siddhartha returned to Bangalore and bought a stock market card for Rs 30,000, along with a company called Sivan Securities, which was renamed in 2000 as Way2wealth Securities Ltd. This company's venture capital division came to be known as Global Technology Ventures (GTV). By 1985, he owned 10,000 acres of coffee farms and reportedly doubled the money he had invested in plantations after the liberalisation of coffee trading in the 90s.
3. He opened the first CCD store in Bangalore’s Brigade Road. At present, it is India's largest coffee chain with around 1,700 cafes, 48,000 vending machines, 532 kiosks and 403 ground coffee selling outlets across the country.
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4. It is believed that CCD was in early talks with Coca Cola to sell a substantial stake. The company was eyeing a valuation of Rs 8,000 to Rs 10,000 crore from Coca-Cola for the stake sale. But, the deal never happened. Siddhartha is also on the board for GTV, Mindtree, Liqwid Krystal, Way2Wealth and Ittiam. He had recently sold 20 per cent stake in Mindtree to Larsen & Toubro through block deal for about Rs 3,210 crore. It led to the downfall of the previous Mindtree management who had entreated Siddhartha not to sell out to Larsen, but failed to convince him.
5. VG Siddhartha has had his share of controversies as well and was accused of tax evasion in 2017. The Income Tax department had conducted raid across 20 locations in Mumbai, Bengaluru, Chennai and Chikmagalur connected to Siddhartha. "The searches in a group involved in coffee, tourism, information technology and other areas concluded with an admission of previously concealed income exceeding Rs 650 crore. The detection of undisclosed income is expected to be a much higher figure," the statement from I-T department had read.
Full Text of VG Siddhartha letter to Board and Employees
"To our Board of Directors and Coffee Day family,
After 37 years, with strong commitment to hard work, having directly clearly 30,000 jobs in our companies and their subsidiaries, as well as another 20,000 jobs in technology companies where I have been a large shareholder since its founding, I have failed to create the write profitable business model despite my best efforts.
I would like to say I gave it my all. I am very sorry to let down all the people that put their trust in me. I fought for a long time but today I gave up as i couldn't take any more pressure from one of the private equity partners forcing me to buyback shares, a transaction I had partially completed six months ago by borrowing a large sum of money from a friend. Tremendous pressure from other vendors let to me succumbing to the situation. There was a lot of harassment from the previous DG Income Tax in the form of attache our shares on two separate occasions to block our Mindtree deal and then taking position of our Coffee Day shares, although the revised returns have been filed by us. This was very unfair and has lead to the serious liquidity crunch.
I sincerely request each of you to be strong into continue running these businesses with new management. I am solely responsible for all mistakes. Every financial transaction is my responsibility. My team, auditors and senior management are totally unaware of all my transactions. The law should hold me and only me accountable, as I have withheld this information from everybody including my family.
My intention was never to cheat or mislead anybody, I have failed as an entrepreneur. This is my sincere submission, I hope someday you will understand, forgive and pardon me.
I have enclosed a list of our assets and tentative value of each assets. As seen below, our assets outweigh our liabilities and can help repay everybody."
(Zee Business does not vouch for the veracity of this purported letter written by VG Siddhartha)