VG Siddhartha found dead: CCD founder reimagined idea of coffee in India, always sought to strike out on his own

Missing for over 48 hours, the body of VG Siddhartha, founder of India's largest coffee chain Cafe Coffee Day, was found on Wednesday morning in Netravati river where the business tycoon was last seen. The Cafe Coffee Day founder had left a note for the Board of Directors and his Coffee Day family days before he went missing.

Siddhartha's body will be taken to his village Cheekanahalli near Chikkamagaluru where his parents live. Siddhartha was their only son.

Son-in-law of former External Affairs Minister SM Krishna, who also served as the chief minister of Karnataka and Governor of Maharashtra, Siddhartha hailed from a family of coffee planters in Chikmagalur in Karnataka. His family interests in coffee plantations in southern India span over 130 years.

In 2015, he was listed as the 75th richest man in India in the Forbes India rich list.

LIVE UPDATES: CCD FOUNDER VG SIDDHARTHA'S BODY FOUND

He held a Bachelors degree in Arts from the University of Mysore and a postgraduate degree in economics from the Mangalore University of Karnataka. After completing his education, instead of joining the family business, he decided to strike out on his own.

According to reports, his father gave him Rs 5 lakh to try out his luck. He bought a piece of land for Rs 3 lakh and kept Rs 2 lakh with him.

He came to Mumbai and started his career as a management trainee trading in the stock market at JM Financial Services (now JM Morgan Stanley) under legendary investment banker Mahendra Kampani.

Two years later he returned to Bangalore and with the Rs 2 lakh as savings bought over Sivan Securities (later Way2wealth Securities) Ltd in 2000.

 VG Siddhartha found dead: CCD founder reimagined idea of coffee in India, always sought to strike out on his own

Caffee Coffee Day founder VG Siddhartha. Photo credit Forbes India

He started his coffee trading company Amalgamated Bean Coffee Trading Company (ABC) in 1993, with Rs 60 million turnover. The company name was later changed to Coffeeday Holding Co.

He was toying with the idea of setting up a coffee brand ever since he started exporting coffee to avoid going through a middleman. In a short span of two years, in 1995 the company Coffee Day Holdings became the largest exporter of coffee. That encouraged Siddhartha to think of other avenues to retain the group's might in the coffee industry, he said in an interview to Forbes.

In 1994, he started with a brand Coffee Day, selling fresh and ground coffee powder outlets in 25 outlets in Bangalore and 20 in Chennai.

When the coffee culture began picking up globally, Siddhartha was tempted to start a similar lifestyle business in India. While walking down the Boat Quay in Singapore, he saw a store selling beer and providing Internet access. Though there were around 30 restaurants in the area, the beer store was the most crowded. That spurred in him the idea to have Internet cafes in India. And thus was born Café Coffee Day.

For FY2019, Coffee Day Enterprises consolidated revenue was 13 percent year-on-year at Rs 4,264 crore, EBITDA was up 15 percent y-o-y at Rs 961 crore and the company reported a net profit after tax at Rs 128 crore, according to a filing with the exchanges.

Income tax troubles

In January this year, the Income Tax Department attached a portion of shares held by Siddhartha and Coffee Day Enterprises Ltd in IT firm Mindtree over a potential tax demand.

Siddhartha began investing in Mindtree from 1999.

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 held over 1.05 crore shares (6.45 percent holding).

VG Siddhartha missing: CCD founder's 'letter' blames his 'failure' on 'pressure' from equity partner, 'harassment' from ex-DG, Income Tax

Full text: Cafe Coffee Day founder VG Siddhartha goes missing; leaves letter to management, staff saying 'I failed as an entrepreneur'

Mindtree's promoters, which included Subroto Bagchi, Krishnakumar Natarajan and NS Parthasarathy together held roughly 13 percent stake in the company.

Siddhartha sells stake to L&T

In 2018, Siddhartha stepped down as independent director of Mindtree. In his letter to the Mindtree board, he said he wanted to be relieved of the board position so that he could devote more time to the Coffee Day Group's business, The Economic Times reported.

Sources told Mint, Siddhartha's intended sale of shares may be related to the Rs 300 crore he owed income tax authorities. Also, the report said, he may be under pressure because of rising debts at his investment firm Sivan Securities Pvt. Ltd.

The promoters of IT company Mindtree vowed that they would unconditionally oppose the attempted hostile takeover bid by Larsen and Toubro, and dubbed it a grave threat to the organisation.

"A hostile takeover by Larsen and Toubro, unprecedented in our industry, could undo all of the progress we've made and immensely set our organisation back," the promoters said in a statement Tuesday, a PTI report said.

The attempted hostile takeover bid of Mindtree by Larsen & Toubro is a "grave threat" and "value destructive" to the organisation collectively built over 20 years, the promoters said pledging to "unconditionally oppose" the hostile takeover attempt.

"Coffee Day Trading and V G Siddhartha (promoter of the company) along with certain other parties have signed a definitive agreement to sell their entire stake in Mindtree Ltd... for a consideration not exceeding Rs 3,269 crore," Coffee Day Enterprises said in a regulatory filing.

Late in June 2019, Larsen & Toubro acquired control of the company with 60.06 percent of the total shareholding of the company, capping months of hostile takeover efforts.

L&T's takeover of Mindtree marked India's first-ever hostile takeover in the IT space.

In June 2019, Coca Cola — the world’s biggest soda company, was in talks to buy into India’s largest café chain Cafe Coffee Day as the American giant wants to gain a foothold in the rapidly growing cafes space. Siddhartha was reportedly selling assets to cut down debt and cover potential tax liabilities.

Favours from father-in-law?

In an interview to Rediff, Siddhartha spoke about speculations that his father-in-law SM Krishna helped him with political favours. "I had already bought most of my coffee plantations before my marriage, which took place in 1989. Krishna became a minister only in 1992. What major favours could he have done for me to help me buy my plantations before that?" he said.

Siddhartha was married to Krishna's daughter, Malvika. They have two children.

Updated Date: Jul 31, 2019 13:37:12 IST