CCD owner VG Siddhartha routed Rs 2,700 crore: Report

Coffee Day Enterprises Limited late founder VG
Siddhartha routed Rs 27 billion ($360 million) out of the company through
transactions first revealed in a note found after his suicide last year,
reported Bloomberg.

Coffee Day Enterprises Limited is the owner of India’s
largest coffee chain Cafe Coffee Day.

According to reports, subsidiaries of Coffee Day paid
advances to a firm controlled by his family to buy back shares held by private
equity investors, repay loans and keep up with interest payments on other
borrowings, the company said in a filing Friday.

The Coffee Day Enterprises is seeking to recover money
from Siddhartha’s firm Mysore Amalgamated Coffee Estates Limited, according to
the filing, reported Bloomberg.

Last year in June, Siddhartha’s body was found
floating in a river two days after he went for a walk along a bridge. After his
death, a letter signed by him was delivered to Coffee Day’s board, in which he
described massive debts, mounting pressure from lenders and took sole
responsibility for unnamed financial transactions.

A probe led by Ashok Kumar Malhotra, a retired senior
official from India’s federal law enforcement agency, found that the demands
from investors, repayments to lenders and the attachment of assets by tax authorities contributed to a
“severe liquidity crisis” for Siddhartha.

“I would like to say I gave it my all,”
Siddhartha wrote in his last note. “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.”

After the outbreak of coronavirus, the coffee chain has found itself in twin crises and it has only increased the urgency of the asset sales to pare the nearly Rs 72 billion debt Siddhartha left it
with.

Sale of a tech park in Bangalore to private equity
giant Blackstone Group brought in Rs 27 billion while selling Coffee Day’s
stake in tech firm Mindtree Limited provided another 18 billion rupees. These
and other deals have helped the company cut its debt to 32 billion rupees, the
filing said.

But the company’s core business is struggling amid
India’s coronavirus lockdown — the biggest and one of the most stringent in
the world.