The body of the founder of India’s largest homegrown café retail chain has been found two days after he went missing, media reports said today (July 31).
VG Siddhartha, who owned the Café Coffee Day (CCD) retail chain, had gone missing near River Netravati in the southern Indian state of Karnataka on the evening of July 29. He was last seen by his driver, who was instructed to drop him off at the bridge, while the two were enroute to Mangaluru. Siddhartha’s body was discovered by local fishermen after it washed ashore, reported the Press Trust of India.
The coffee baron was reportedly under pressure from regulators and the taxman for alleged irregularities in the recent sale of his stake in the IT services company Mindtree. There were also allegations of insider trading against him.
After Siddhartha went missing, a letter purportedly written by him emerged on social media, where he hints at being hounded by the taxman and private equity lenders for the Mindtree deal. The income-tax (I-T) department has challenged the authenticity of Siddhartha’s signature in the letter.
BSE has sought a clarification from the company on its authenticity. “The exchange has sought clarification from Coffee Day Enterprises Ltd (CDEL, the parent of CCD) with reference to the media reports titled ‘Authenticity of Siddhartha’s ‘last note’ doubtful, claims I-T source,” the bourse said in a note yesterday (July 30).
Shares of CDEL opened at Rs122.75 ($1.79) on BSE today (July 31), down 20% from its previous close of Rs153.4. The shares had fallen 20% yesterday after news of Siddhartha’s disappearance.
Siddhartha had been struggling to make CCD profitable for a long time, despite the café retail chain expanding its footprint across India.
Stiff competition in the segment and high real estate rentals, coupled with less-than-expected growth in the coffee retail business, have resulted in CDEL’s lower profits and rising debt, company data show.
The Mindtree deal in March this year, where Siddhartha sold his 20.32% stake for Rs3,269 crore to engineering conglomerate Larsen & Tourbo (L&T), was meant to pare his debt.
The business fraternity has expressed shock at Siddhartha’s demise. Sachin Bansal, co-founder of the e-commerce major Flipkart, took to social media to recollect their relationship.
“VG Siddhartha’s story is a tragic end to a great success story; shocking to think that someone who created India’s Starbucks may have taken his life,” Kiran Mazumdar-Shaw, chairperson and managing director of Biocon, told news channel CNBC-TV18.
She also expressed her anger over his alleged harassment at the hands of the taxman:
Kunal Bahl, co-founder of Snapdeal, remembered Siddhartha as an “an absolute gentleman.”
Amit Ranjan, co-founder of SlideShare, a hosting service for professional content, said the deceased certainly wasn’t a failed entrepreneur.