Coffee Day Enterprises founder VG Siddhartha is expected to offer alternative security to release his attached shares in Mindtree, media reports said. He is the single largest shareholder in the mid-size IT services headquartered in Bengaluru.
At the end of December 2018 quarter, Siddhartha held 54.69 lakh shares (3.3 percent stake) in Mindtree, while Coffee Day Enterprises Ltd had more than 1.74 crore shares (10.63 percent stake). Another entity, Coffee Day Trading Ltd holds over 1.05 crore shares (6.45 percent holding).
Mindtree's promoters, which include Subroto Bagchi, Krishnakumar Natarajan, NS Parthasarathy, and Rostow Ravanan, together hold roughly 13 percent stake in the company.
Siddhartha could offer shares of other companies, bank guarantees or a bond, a report in The Economic Times said.
The I-T department has attached a portion of shares held by Siddhartha and Coffee Day Enterprises Ltd in IT firm Mindtree over a potential tax demand.
Further, Coffee Day Enterprises—which operates popular coffee chain CCD—said it has already discharged its tax liability along with the revised returns.
"… there is no tax liability payable by the company and its subsidiaries as per the revised returns filed. The promoter has discharged all the tax liability along with the revised returns. Further, there is no undisputed tax liability for the promoter and the company," Coffee Day Enterprises informed in a regulatory filing on Saturday.
It also said that the "required action will be taken to release these shares in the next few days".
According to the company, 74.90 lakh shares of Mindtree have been affected by the provisional attachment by the Income Tax Department, in which 22.20 lakh shares are held by Coffee Day Enterprises in Mindtree and 52.70 lakh shares by its promoter Siddhartha.
Coffee Day Enterprises and its promoter V G Siddhartha have "received orders u/s. 281B of Income Tax Act, 1961 provisionally attaching few shares held in Mindtree to safeguard the interest of the Revenue in respect of possible future tax and penalty obligations in respect of open assessments", it said.
"The company would like to clarify that in response to notices u/s 148 & 153A of the income tax, the promoter and the company have filed required revised returns," said Coffee Day Enterprises in a clarification filed to bourses.
Siddhartha, who owns about 21 percent stake in Mindtree, is said to be in advanced discussions with various entities to sell his shares in the IT company.
On 26 January, Mindtree had also informed the stock exchanges that the I-T department has attached a portion of shares held by Siddhartha and Coffee Day Enterprises Ltd in IT firm Mindtree.
It added that the attachment also "prohibited for transfer or charge" of 22.2 lakh equity shares of Coffee Day Enterprises Ltd, and 52.7 lakh shares held by Siddhartha.
The order would be applicable for six months from the date of the order i.e. 25 January 2019, it said.
--With PTI inputs
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Updated Date: Jan 28, 2019 07:56:21 IST