New Delhi: Cafe chain operator Coffee Day Enterprises on Tuesday said it is assessing the situation after its founder and chairman VG Siddhartha went missing and formulating appropriate steps to ensure business operations are unaffected.
The company's board has held an emergency meeting following the disappearance of Siddhartha and also reviewed the letter purportedly signed by him and shared copies with relevant authorities, the company said in a regulatory filing.
"We are shocked by this development and our thoughts and prayers are in support of his family and loved ones... 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," Coffee Day said.
The board said it has also "sought the assistance of local and state authorities, who are doing their utmost, and relevant officers of the company are cooperating with the authorities as requested", the filing said.
The purported letter sent by Siddhartha to the board claimed that he was being pressured by "one of the private equity partners" forcing him to buy back shares, a transaction he had partially completed six months ago by borrowing a large sum of money from "a friend".
The letter also talked about "harassment" by I-T Department official, who initially attached his shares in Mindtree.
On Tuesday morning, the company confirmed that Siddhartha has been missing since Monday evening.
The company said Siddhartha is not reachable since Monday evening. "We are taking the help of concerned authorities."
Siddhartha reportedly had been witnessing rising debts, especially in the last few years.
"I would like to say I gave it my all. 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 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," he purportedly said in the letter.
Siddhartha, in the said letter, also took sole responsibility of all financial transactions undertaken by the company.
"I sincerely request each of you to be strong and to continue running these businesses with a new management. I am solely responsible for all mistakes. Every financial transaction is my responsibility. My team, auditors and senior management are totally unaware of all my transactions. The law should hold me and only me accountable, as I have withheld this information from everybody including my family".
The letter, however, does not elaborate more on that.
"My intention was never to cheat or mislead anybody, I have failed as an entrepreneur. This is my sincere submission, I hope someday you will understand, forgive and pardon me," he added.
Coffee Day Enterprises had seen its net loss widen to Rs 67.71 crore in the fiscal year ended March 31, 2018, from Rs 22.28 crore loss in the previous year. This despite revenues climbing 59 percent to Rs 122.32 crore.
He was reportedly in talks to sell his real estate venture Tanglin Developments Ltd to New York-based private equity giant Blackstone Group.
The MindTree sale had vastly improved his financial condition and the real estate deal would have further cut his debt. He was also in talks to sell Coffee Day Enterprises, where he held 32.75 percent stake, to Coca-Cola for as much as $1.45 billion.
Shares of Coffee Day Enterprises dropped 20 percent on Tuesday, eroding Rs 813 crore from its market valuation.
Updated Date: Jul 30, 2019 19:16:01 IST