Who is VG Siddhartha, Cafe Coffee Day (CCD) founder who has tragically gone missing; was linked to Mindtree and Coca-Cola

VG Siddhartha, who is former Karnataka chief minister SM Krishna’s son-in-law, and is the owner of popular Cafe Coffee Day outlets, has gone tragically missing from near river Netravati. Monday evening was the last time VG Siddhartha was seen alive. Siddhartha's firm Amalgamated Bean Company is one of India’s largest exporters of coffee. He also has several other businesses in the technology and the hospitality sectors. He has as many as 60,000 coffee vending machines in India as well as in some foreign countries.

VG Siddhartha was born in Chikmagalur district of Karnataka. His family has been in the business of coffee plantation for around 140 years. After earning a Masters from the Mangalore University, Siddhartha joined JM Financial Limited in 1983-1984 in Mumbai as a management trainee/intern in Portfolio Management and securities trading. After two years, he 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.

According to reports, Siddhartha in March this year garnered about Rs 3,200 crore by selling the 20.32% stake held by him and two CCD affiliate firms (Coffee Day Enterprises Ltd and Coffee Day Trading Ltd) in software services company Mindtree Ltd to Larsen and Toubro Ltd (L&T). The deal has reportedly helped him repay his debt of about Rs 2,900 crore, vastly improving his financial condition. CCD had reportedly run into losses of Rs 7,000 crore. 

Cafe Coffee Day has 1,752 outlets across India as of March 2019. Coffee Day Enterprises clocked revenue of Rs 1,777 crore and Rs 1,814 crore In FY18-19 respectively. The company is reportedly eyeing revenue of Rs 2,250 crore by March 2020.

Meanwhile, a letter written by VG Siddhartha addressed to the Board of Directors of the Cafe Coffee Day family has reportedly surfaced. In the letter, he has written, "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 borrowing a large sum of money from a friend."

In his last letter, to the board and family of CCD, VG Siddhartha has written, "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."

Notably, Siddhartha was raided by tax dept in a controversy that included alleged charges of tax evasion in September 2017. Raids were conducted at over 20 locations in Mumbai, Bengaluru, Chennai and Chikmagalur by the IT departments of Karnataka and Goa. Sleuths with the I-T department had stated that Siddhartha had previously concealed income exceeding Rs 650 crore. 

Full Text of VG Siddhartha letter to Board and Employees

VG Siddhartha

"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)