VG Siddhartha dead: Mystery around identity of equity partner mentioned in coffee tycoon's letter deepens; CCD annual report points at huge debt

  • As far as lenders are concerned, his companies had borrowed money from various financial institutions and as early as June this year Siddhartha had pledged 1.17 crore shares of Coffee Day Consolidations Private Limited in favour of IFCI Financial Services in connection with the loan availed from IFCI Ltd.

  • NLS Mauritius LLC is the largest shareholder among overseas firm with 2.24 crore shares in the firm followed by KKR Mauritius PE Investment Limited with 2.18 crore shares.

  • According to government data on FDI equity inflow in December 2015, Standard Chartered Private Equity (Mauritius) had also invested in Coffee Day Enterprises Limited.

New Delhi: Days before his death, founder of India's largest coffee chain Cafe Coffee Day (CCD) VG Siddhartha in his letter to the management and employees of the company mentioned about 'pressure' from one of the equity partners and other lenders.'

There is still a mystery around the identity of the firm, he indicated in the letter.

 VG Siddhartha dead: Mystery around identity of equity partner mentioned in coffee tycoons letter deepens; CCD annual report points at huge debt

File image of VG Siddhartha. News18

NLS Mauritius LLC is the largest shareholder among overseas firm with 2.24 crore shares in the firm followed by KKR Mauritius PE Investment Limited with 2.18 crore shares. Marina West (Singapore) holds 1.14 crore shares of Coffee Day Enterprises Limited. According to government data on FDI equity inflow in December 2015, Standard Chartered Private Equity (Mauritius) had also invested in Coffee Day Enterprises Limited.

However, the name of the firm that pressurised Siddhartha remains in the domain of speculation.

As far as lenders are concerned, his companies had borrowed money from various financial institutions and as early as June this year Siddhartha had pledged 1.17 crore shares of Coffee Day Consolidations Private Limited in favour of IFCI Financial Services in connection with the loan availed from IFCI Ltd.

Coffee Day Consolidations Private Limited floated in 2000 has more than a dozen outstanding loans and as collateral shares of Coffee Day Enterprises Limited were pledged in favour of the financial institutions including IDBI. Siddhartha's other venture Coffee Day Global Limited has 14 outstanding loans. The 'pressure' from lenders which Siddhartha mentioned in the letter is quite understandable since his SICAL Logistics Limited, which he had acquired in 2011, is burdened with 73 outstanding loans.

Tanglin Development Limited which is into the business of developing technology parks and SEZs for the Coffee Day too has huge outstanding loans beginning 2016. Another firm Coffee Day Trading Limited has over 40 outstanding loans and as early as in March 2019, the company borrowed money from two financial institutions.

Tanglin Retail Reality Development Private Limited has about 17 outstanding loans. It appears from the Coffee Day subsidiary companies records that promoters tried to create a diversified portfolio and borrowed heavily from the financial institutions. Another firm of his Sivan Securities had recently in April borrowed Rs 15 crore from IDBI Bank and the firm has a total outstanding of Rs 42 crore.

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Although Siddhartha did not name any financial institution that was putting pressure on him, it is clear that many of his companies (annual report 2018 of Coffee Day Enterprises mentioned around 45 subsidiaries, 3 associates and 3 joint ventures) were reeling under huge debt.

What is more intriguing in the purported letter where he has mentioned that "My team, auditors and senior management are totally unaware of all my transactions."

It appears from the annual report that company's audit committee was meeting regularly as it has been mentioned that 'there have been no instances during the year where recommendations of the audit committee were not accepted by the board.' Also, during the financial year 2017-18, the meetings of the board of directors were held five times. Again the purported letter mentioned that he 'withheld this information from everybody including my family.'

This further deepens the mystery as the financial health of flagship as well as other subsidiary companies must have been known to auditors and the board.

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Updated Date: Jul 31, 2019 20:25:03 IST