New Delhi/Mumbai: V.G. Siddhartha, the founder of India’s largest coffee chain, went missing from a bridge over the Netravathi river near Mangaluru and is suspected to have committed suicide, triggering a massive search and shocking India’s business community.
The 59-year-old was last seen late on Monday when he asked his driver to park the car near the bridge before going for a walk, according to local police officials. The driver called the police when Siddhartha failed to return after more than an hour. Search operations to find Siddhartha were suspended for the night on Tuesday. It will resume on Wednesday morning.
Café Coffee Day, the coffee chain Siddhartha founded in 1996 in Bengaluru, grew to become India’s largest, with more than 1,700 cafés across the country. Siddhartha directly holds 32.75% in Coffee Day Enterprises Ltd (CDEL), which owns the coffee chain and several other businesses. The Coffee Day stock plunged 20% on Tuesday as investors panicked.
In a letter allegedly written by Siddhartha to the company’s directors, the entrepreneur apologized for letting down people and cited pressure from private equity investors and harassment by tax authorities.
“I would like to say I gave it my all. I am very sorry to let down all of the people that put their trust in me. I fought for a long time, but today I gave up," he wrote in the letter. Mint could not independently verify its authenticity.
Siddhartha, son-in-law of former Karnataka chief minister S.M. Krishna, has been facing increasing pressure from creditors to pay dues and has been locked in a long battle with tax authorities over undisclosed income. Tax officials raided his home and offices in 2017 and claimed to have found evidence of tax evasion.
Earlier this year, tax officials had provisionally blocked him from selling his stake in software services company Mindtree Ltd to engineering giant Larsen and Toubro Ltd. Siddhartha finally sold his 20.32% stake in Mindtree to L&T for ₹3,200 crore in March.
The income-tax department vigorously denied charges of harassment. In a press release, it said it provisionally attached the shares earlier this year to “protect the interests of revenue" out of the income admitted by the assessee.
“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. Tremendous pressure from other lenders lead to me succumbing to the situation," Siddhartha’s letter read.
Private equity firm KKR, one of the backers of CDEL, said in a statement, “We believe in V.G. Siddhartha and had invested in the company about nine years ago." Standard Chartered Private Equity, another CDEL investor said, “We backed V.G. Siddhartha in early 2010 and have had a great relationship with him throughout."
His disappearance shocked business leaders and investors in India. “The government needs to engage with honest wealth creators and look at how they need to tackle India Inc.’s fiscal health," Biocon Ltd chairman and managing director Kiran Mazumdar-Shaw said in a post on Twitter.
Café Coffee Day was instrumental in developing the café culture in India, a country where tea has been the beverage of choice for long. Young people flocked to its cafés to conduct business meetings or just meet for a casual date, long before Starbucks, the company it was modelled on, entered India.