Missing CCD Founder VG Siddhartha’s letter sends ripples through corp world
The news of VG Siddhartha, Founder, Café Coffee Day (CCD), who has been reported missing since Monday night (July 29, 2019), has thrown the corporate world into a tizzy. What has sent ripples across the industry is a letter, purportedly written by Siddhartha to CCD’s Board of Directors, where he has mentioned about failing to create “the right profitable business model despite my best efforts” and that he was being pressurised by one of the private equity partners to buy back shares and harassment faced at the hands of “the previous DG – Income Tax”.
Siddhartha’s driver, who was with him when he went missing, informed the police that the CCD chief was headed for Sakaleshpur from his home in Bengaluru, but on the way he had asked his driver to go towards Mangaluru.
News reports state that on reaching a bridge over the Netravati river in the Kotepura area, Siddhartha got down from the car and told his driver that he was going for a walk. “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 agencies.
Given the high profile of the missing person – Siddhartha is the son-in-law of former Karnataka Chief Minister SM Krishna – more than 200 policemen and divers on about 25 boats have been carrying out searches for him. The Deputy Commissioner said that sniffer dogs have also been pressed into service.
In the letter, now circulating in the media, Siddhartha states, “My intention was never to cheat or mislead anybody. I have failed as an entrepreneur”.
Ever since the news of Siddhartha’s disappearance spread, social media has been agog with messages expressing shock and sympathy. There are some conspiracy theories floating around as well. Phrases like “Tax Terrorism”, “Ease of doing business in India”, perils of debt driven business, et al, have been doing the rounds. Here are some of the reactions:
If VG Siddhartha letter is genuine (yet to be verified), then it only confirms what bizmem have been saying for a while now: tax terrorism is taking us back to the past, retarding investment/growth. And if this can happen to the son in law of SM Krishna, god help small bizmen.— Rajdeep Sardesai (@sardesairajdeep) July 30, 2019
We should be cautious & not jump to conclusions & blame the Govt of the day for biz’men|farmer |student suicides.— Lloyd Mathias (@LloydMathias) July 30, 2019
a) suicide is a mental health issue
b) exam stress/farm distress/ failure in business is endemic & happens across nations so to solely pinpoint Govt may be facetious
CCD promoter VG Siddhartha’s parting note to the Cafe Coffee Day board and employees - where he points to a PE partner forcing him to buy back shares and DG of Income Tax harassment - raise big questions on the ease of doing business in India. Very very sad. pic.twitter.com/AtMSpE26dI— Lloyd Mathias (@LloydMathias) July 30, 2019
Cost of producing a cup of coffee at #CafeCoffeeDay is Rs 2. It is sold at Rs 100. A margin on 5000%. Yet #VGSiddhartha was in financial trouble so big he took the extreme step. Hand this case to CBI. Let it examine how he started CCD and grew so big. Who was involved.
Cost of producing a cup of coffee at #CafeCoffeeDay is Rs 2. It is sold at Rs 100. A margin on 5000%. Yet #VGSiddhartha was in financial trouble so big he took the extreme step. Hand this case to CBI. Let it examine how he started CCD and grew so big. Who was involved.— Santosh Kumar (@sanku1992) July 30, 2019
Police are yet to fine any definitive clues about Siddhartha’s whereabouts.
Meanwhile, Coffee Day Enterprises, the parent company of CCD, informed BSE and NSE that, “Mr V G Siddhartha, Chairman and Managing Director of Coffee Day Enterprises Limited has not reachable since yesterday evening. We are taking the help of concerned authorities. Company is professionally managed and led by competent leadership team, which will ensure continuity of business.”
Siddhartha was in the news recently after selling his stake in IT company Mindtree to L&T. He was also reportedly in talks with Coca-Cola regarding stake sale in the CCD business. In the last 23 years, CCD has built up a reputation and brand value for itself for its great coffee and services in a primarily tea drinking nation. CCD has also created thousands of jobs for Indians over the years. The brand is also known to give employment opportunities to the differently abled.
American company, Starbucks’ entry has shaken things up in the coffee café space, though CCD’s reign is far from over. Siddhartha’s coffee retail business was expecting to close the year ending March 2020 with sales of about Rs 2,250 crore.
Café Coffee Day was started as a retail restaurant in 1996. The first CCD outlet was set up on July 11, 1996, at Brigade Road, Bengaluru, Karnataka. It rapidly expanded across various cities in India, adding more stores with more than 1,000 cafés opened across the nation by 2011.