Liquidity crunch pushes Café Coffee Day founder to death

VG Siddhartha, founder-chairperson Cafe Coffee Solar day

The Café Coffe Day (CCD) founder-chairman, VG Siddhartha, who was missing for the last ii days, was plant dead and his body was recovered today early on forenoon [31 July 2019] from the Nethravathi River almost Mangaluru – 350 kilometers from Bengaluru – following a massive search performance lasting approximately 30 hours. Siddhartha was in the news for the past several months due to his debt and taxation liabilities. Nosotros also recently reported that Coca-Cola plans to larn CaféCoffee Twenty-four hour period. CCD was in talks with Coca-Cola to sell some of its equity, although Siddhartha intended to go along the controlling stakes with himself. The CCD and Coca-Cola deal was yet in the negotiation phase.

To reduce his financial burdens, Siddhartha sold his 20.32% stake in two CCD chapter firms (Coffee Twenty-four hour period Enterprises Ltd. and Java Solar day Trading Ltd.). He also divested his shareholding in software services company Mindtree to Larsen and Toubro earlier this year for Rs iii,200 crore.

Nonetheless, recent reports reveal that CCD shareholders had doubts near the CCD's debt. The Mindtree deal was supposed to exist a lifesaver for reducing the company'southward debt but it didn't turn out to be then. At that place were questions from investors on the relatively high debt besides the unusually high cash held by the company'south realty subsidiaries. While the questions about debt continued, the answers from CCD were apparently unconvincing.

Siddhartha mentioned in his last letter addressed to the Café Coffee Twenty-four hours board of directors and the Coffee Solar day family unit, that he gave up as he could not have whatever more pressure level. He wrote, "I have failed to create the correct profitable business model despite my best efforts. I fought for a long time just today I gave up as I could not take any more pressure from ane of the individual equity partners forcing me to buy back shares. In that location was a lot of harassment from the previous DG income tax in the form of attaching our shares on 2 split up occasions to cake our Mindtree bargain so taking position of our Coffee Day shares, although the revised returns accept been filed by u.s.a.. This was very unfair and has led to a serious liquidity crunch."

He took the responsibility for all the financial transactions and mentioned in the alphabetic character, "The police force should hold me and only me accountable. My intention was never to crook or mislead everyone, I have failed every bit an entrepreneur." He enclosed a list of assets and the tentative value of each asset with his letter. According to him, the assets outweigh the company'south liabilities and can assistance to repay all debts.

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