CCD Founder V.G. Siddhartha Reported Missing, Blames Taxman for Harassment in 'Letter'

In a letter purportedly written by him, SIddhartha also alleges harassment from his private equity partners and lenders.

New Delhi: Cafe Coffee Day founder V.G. Siddhartha was reported to have gone missing after he left from Bengaluru on Monday night, according to local media reports that quoted Karnataka-based police officers.

Siddhartha, the son-in-law of former Karnataka chief minister S.M. Krishna, was headed for Sakaleshpur but, on the way, he had asked his driver to go towards Mangaluru, according to the police.

On reaching a bridge over the Netravati river in the Kotepura area in Dakshina Kannada district, he got down from the car and told his driver that he was going for a walk.

In an emergency board meeting held on Tuesday evening, the company started to formulate “appropriate steps to ensure business operations are unaffected”.

“The board is confident that the professional management of the company and each of the entities in the Coffee Day Group and their respective leadership team, will ensure continuity of all business operations consistent with past behaviour,” it said in a statement following the emergency meeting.

“In the interim, the board is evaluating and assessing the situation, formulating appropriate steps to ensure business operations are unaffected, and has resolved to co-operate with authorities,” it added.

Shares of Coffee Day Enterprises tanked 20% and hit the lower circuit limit as well as 52-week low of Rs 154.05 apiece on the Bombay Stock Exchange after news surfaced that its founder has gone missing.

“He (Siddhartha) asked the driver to wait till his arrival. When he did not return even after two hours, the driver approached the police and lodged a missing complaint,” deputy commissioner of Dakshina Kannada district Senthil Sasikant Senthil told PTI.

More than 200 policemen and divers on about 25 boats were carrying out searches for him.

The deputy commissioner said that sniffer dogs have also been pressed into service.

“The help of local fishermen is being taken in the search. We are checking who all he spoke to over phone,” Mangaluru Police Commissioner Sandeep Patil said in a message.

Congress MLA U.T. Khader, who reached the spot, told local news channels that the police were looking into “all angles”. “The search is on,” he said.

In Bengaluru, Chief Minister B.S. Yediyurappa visited S.M. Krishna’s residence and held discussion with the family members.

Senior Congress leader D.K. Shivakumar also visited Krishna’s residence. In a tweet put out on late Tuesday morning, Shivakumar makes reference to a letter allegedly written by Siddhartha that made its way into the public domain today.

Letter blames taxman?

The letter, which is addressed to the Coffee Day Enterprises’ board of directors indicates that Siddhartha was under”tremendous pressure” from one of the private equity partners. He also stated that he had “failed to create the right business model despite my best efforts”.

“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,” Siddhartha said in the letter, the contents of which were posted by CNBC-TV18 on Twitter.

The Wire could not independently verify the authenticity of the letter. In a late-evening statement, the income tax department said that the authenticity of the letter “is not known” and that Siddhartha’s signature does not tally with his handwriting on other official documents like the company’s annual report.

Credit: I-T department.

Credit: I-T department.

In his purported letter though, Siddhartha also alleged harassment by the previous Director-General, Income Tax in the form of attaching shares on two separate occasions to block the Mindtree deal and then taking possession of Cofee Day shares despite the revised returns being filed.

“This was very unfair and has led to a serious liquidity crunch,” he added in the letter.

Siddhartha requested the company to “be strong and to continue running these businesses with a new management”. Takin full responsibility, he said that “every financial transaction is my responsibility. My team, auditors and senior management are totally unaware of all my transactions.”

He also added that “the law should hold me and only me accountable, as I have withheld this information from everybody including my family.”

Expressing regret, he wrote that he had “failed as an entrepreneur” and that it was never his intention to “cheat or mislead anybody”. “This is my sincere submission, I hope someday you will understand, forgive and pardon me,” he added.

Siddhartha concluded the letter by saying that he had enclosed a list of assets and the tentative value of each asset and added that the assets outweighed the liabilities and could “help repay everybody”.

(With inputs from PTI)