VG Siddhartha, the founder of India's largest coffee chain Cafe Coffee Day and the owner of Asia's single largest coffee estate, is
reportedly missing since Monday evening. CNN-News18 spoke to a board member of Coffee Day Enterprises who spoke on condition of anonymity. Excerpts: Was there any indication at all of such a thing happening?
There was absolutely no indication on his part. In fact, if you look at the actual balance sheet of Coffee Day Enterprises, the debt portion had come down drastically after Siddhartha sold his shares in Mindtree [Siddhartha sold his entire 20 percent equity stake in consultancy firm Mindtree to Larsen & Toubro Ltd for Rs. 3,300 crore]. The bulk of the portion that had gone at the time of the Initial Public Offering (IPO) [in 2015], had gone for debt reduction. Subsequently, these Mindtree shares also went for that.
If you look at the details provided by rating agencies, the total amount of outstanding non-convertible debentures (NCDs) is about Rs 250 crore. For a 900 crore Ebitda (Earnings before Interest, Taxes, Depreciation, and Amortization) company, a debt of Rs 250 crore is no big deal.
Also read: CCD founder V G Siddhartha reportedly missing: Here's all you need to know about the coffee king Was there any huge private debt?
I have no idea if there are other private transactions that were made outside the company. We can only comment about the company’s balance sheets — whether it has assets to take care of the debt – which in this case, was not an issue at all. What Sidhartha did in his personal capacity, nobody knows.
But he was good with finance management, so it is surprising to see this day...
He was excellent with finance management and he was an entrepreneur in the true sense of the word — he built this business, he knew this business inside out. Entrepreneurs like him are critical for a country’s economy as they play a huge role in wealth creation and generating employment.
So what could have led to this?
I am as baffled as you are — as far as Coffee Day Enterprises is concerned I don't see any problem, but at the same time there are also issues of making disclosures to the exchanges, because that was the listing requirement. So whatever formality is there has to be done.
Yes, he was in talks with Coca-Cola to sell his flagship chain, along with another equity company. But those were just talks. Like I said, the Mindtree exit reduced debt portion of Coffee Day Enterprises substantially and brought it all within manageable limits.
The best way to check on this is through rating agencies. They would have done the accounts, their assessment is more valid as they are an external agency and hence would conduct the exercise impartially.
Also read: 'I fought for a long time but today I give up': VG Siddhartha wrote to CCD board His wife is also a CCD board member?
Yes, his wife is also a board member.
And his son is also with the company?
No, I'm not aware. I have met the son a few times but I am not aware if he held any position in the company.
So Siddhartha was running the show? Also read: 'Could not take pressure from one of the PE partners': Read full text of VG Siddhartha's letter to CCD board
Siddhartha was all in.
What is this he talks about harassment by income tax officials?
My understanding is that at the time the Income Tax notice was slapped on him he had said that he will pay it after which he said he will appeal to the high court as per the law. He had given it in writing that he will clear his dues. But the officials blocked the Mindtree shares. At that time he had said, “There are so many assets, so many things that you could have blocked. Why just Mindtree, when we were on the verge of the transaction taking place?” This, according to me, appears to be the issue.
Subsequently the I-T higher ups had cleared it because Siddhartha had given in writing: “We will make good every paisa whatever tax man says — even though our auditors feel we are not entitled to pay — we will pay and then we will appeal.”
Siddhartha was not the kind of person who would overstep authority. He would always comply, keep the law on the right side and then go for an appeal — as with any other citizen.
Also read: Did liquidity stress lead to CCD founder VG Siddhartha disappearance?
Unless we get some feedback or some information on that this is a surmise. And I hope that is wrong.
On the face of it, it does look like suicide?