VG Siddhartha, the founder-owner of Cafe Coffee Day (CCD) and son-in-law of former Karnataka chief minister SM Krishna, has gone missing from Mangaluru in Karnataka. In a letter to CCD board dated July 27, Siddhartha said, “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 could not take any more pressure from one of the private equity partners forcing me to buy back shares, a transaction I had partially completed six months ago by borrowing a large sum of money from a friend. Tremendous pressure from other lenders lead to me succumbing to the situation.”
In his letter, Siddhartha also alleged harassment by the previous DG of Income Tax. Speaking anonymously to Network-18, a CCD board member said debt was "not an issue" for the company. The person also highlighted that Siddhartha had used the proceeds from the Mindtree stake sale for reducing the debt of CCD significantly.
Talking to CNBC-TV18's Shereen Bhan, Chairman of Aarin Capital Mohandas Pai said: “I have heard many horror stories about the way income tax officials treat individuals when they go on a raid; many chartered accountant friends who faced the issue told me that sometimes the officials confined people for 24-36 hours. They don’t allow food to come in, they don’t allow doctors to come in, they are very aggressive and there are one or two cases where they have beaten up people and forced them to sign a letter, forced them to confess. I think what we need today is clear norms, to be laid down by the government. We have elected political leaders to protect us, they cannot be a party to such treatment by tax officials and I think we need to have a clear protocol that when they come to you they are supposed to let you talk to your advocate, remind you of your rights and treat people with dignity. People should not be treated as if they are criminals.”
Speaking about private equity (PE) pressure on Siddhartha, Pai said that PE sometimes puts pressure on individuals. “I wish we know who is the person who has put pressure and we need to find out what exactly has happened. It is true that PE sometimes puts pressure asking you to sell. Most people can take it, but these are businesses issues. Some people have great self-respect, they are very careful and they feel a sense of failure when they are not able to keep a promise. So I think it should not have happened, if it has happened to him."
Pai also points out that nothing is worth taking one's life. "I wish he had spoken to a few people and try to work out some arrangement. Your life is very important and in our society we respect human life, we respect human beings and everybody’s life is very important. Nobody should be forced to give up their life for not being able to pay a debt,” he observed.