CCD Founder VG Siddhartha Death: Here's What Led to Fund Crunch in Cafe Coffee Day
In a letter, Cafe Coffee Day or CCD founder VG Siddhartha cited "harassment" at the hands of a senior income tax official as one of the reasons for financial problems his company is facing.
Bengaluru, July 31: The mystery surrounding the disappearance of Cafe Coffee Day or CCD founder VG Siddhartha got solved with the police recovering his body from Karnataka's Netravathi river near Mangaluru on Wednesday. Two days prior to his disappearance, VG Siddhartha wrote a letter to employees and board of directors of CCD that revealed he was in deep debt.
In the letter, Siddhartha cited "harassment" at the hands of a senior income tax official as one of the reasons for financial problems his company Cafe Coffee Day is facing. "There was a lot of harassment from the previous DG income tax in the form of attaching our shares on two separate occasions to block our Mindtree deal and then taking the position of our Coffee Day shares, although the revised returns have been filed by us. This was very unfair and has led to a serious liquidity crunch", Siddhartha said in the letter.
The entrepreneur, in the letter, also said he had assets of over Rs 18,290 crore, which should help pay off his debts. According to a March 31, 2019 stock exchange filing, there was about Rs 6,500 crore debt on Siddhartha. Moreover, the sale of his Mindtree stake in May would have reduced his debt considerably. However, this didn't go as the 60-year-old businessman had expected. CCD Founder VG Siddhartha Death: Fisherman Claims Seeing a Man Jumping Into Netravati River on Monday.
Siddhartha's problems started in 2017 when the Income Tax department accused him of evading taxes and raided his residence and Coffee Day premises at over 20 locations. During the investigation, the I-T department claimed to have found Rs 650 crore of undeclared income by his Cafe Coffee Day. In January this year, the I-T department also attached 74.90 lakh shares in Mindtree, of which 22.20 lakh shares belonged to Coffee Day Enterprises and 52.70 lakh belonged to Siddhartha.
Trouble mounted for Siddhartha when in February he received an order under Section 281-B of the Income Tax Act, 1961, provisionally attaching 46,01,869 shares of Coffee Day Enterprises held with Way 2 Wealth Brokers, as reported by Business Today. Meanwhile, the I-T department also asked the Enforcement Directorate to probe money laundering angle over transaction worth Rs 1 crore. However, nothing was found out by the ED.
The developments reportedly didn't let Siddhartha strike a deal to pay his debt. The I-T department, however, put out a detailed rebuttal of Siddhartha's "harassment" allegations and said that the CCD founder had evaded tax on undisclosed income.
(The above story first appeared on LatestLY on Jul 31, 2019 11:01 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).