Cafe Coffee Day owner VG Siddhartha goes missing near river, CCD, Sical Logistics shares crash 20%, hit lower circuit; what you can do
Cafe Coffee Day owner VG Siddhartha, who has two listed companies, CCD and Sical Logistics, has gone missing in Mangalore making these two stocks crash on Dalal Street.
Cafe Coffee Day owner VG Siddhartha, who has two listed companies, CCD and Sical Logistics, has gone missing in Mangalore making these two stocks crash on Dalal Street. Both Cafe Coffee Day and Sical Logistics have been hit by heavy selloff since the opening of the markets today. The Cafe Coffee Day stocks hit the lower circuit and tanked 20 per cent immediately after the opening bell while the Sical Logistics share price went down around 20 per cent to Rs 72.35 per stocks. Stock market experts are of the opinion that the major reason for such a crash in these two stocks is due to the company's promoter VG Siddhartha going missing. They say that fundamentals of Cafe Coffee Day are already in bad shape and once the news of the 'promoter going missing broke', the heavy selloff was bound to happen.
Speaking on the whole affair, Prakash Pandey, Head of Research at Fairwealth Securities said, "CCD and Sical Logistics share prices have tanked to the tune of near 20 per cent and both have hit the lower circuit immediately after the opening bell as the news break of promoter VG Siddhartha has gone missing had started to circulate from yesterday evening. Market investors already had some doubts in regard to these counters as the IT raids, company not able to repay the PE investors had started to surface much earlier."
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On the suggestion to the market investors who are holding these stocks, Prakash Pandey said that there is no hope for the counter as the stocks are already weak and once the news flash of its promoter VG Siddhartha gone missing is out and his family is not contesting it, the stocks are further expected to go down.
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)
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