Probe finds Rs. 20 billion missing after V.G. Siddhartha’s suicide

Probe finds Rs. 20 billion missing after V.G. Siddhartha’s suicide

March 16, 2020

New Delhi: An investigation into Coffee Day Enterprises Ltd., initiated by its Board after the death of Founder V.G. Siddhartha, is likely to conclude that at least Rs. 20 billion is missing from its accounts, according to people familiar with the matter, a report said. 

The months-long probe following the suicide of Siddhartha in July 2019 examined the financial transactions of India’s largest coffee chain and its dealings with dozens of private companies owned by the entrepreneur. 

The draft report, running more than hundred pages, points to billions of rupees that have gone missing, said the people, asking not to be named because the details aren’t public. It also details hundreds of transactions between the founder’s listed and personal businesses that were not conducted at arm’s length, they said.

Though the report is in its final stages, the precise details could change before its release, expected as early as this week, the people said. The missing funds could total more than Rs. 25 billion, one person said. “The investigation report is still a work in progress, and not finalised,” a spokesman for the company said. 

After the death of Siddhartha, the company faced a severe liquidity crunch and had ‘zero cash’ in the bank. It struggled with day-to-day expenses and paying salaries has been a strain, the report said. 

Plantations for sale

Meanwhile, the family of Siddhartha has put most of its personal assets, including 10,000 acres of plantations, for sale to repay lenders and the potential fallout of the ongoing probe. 

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Active discussions are on with potential buyers for nearly 40 percent of the plantation business, while the search is on for people to buy remaining holdings, sources said. A complete sale of plantations may fetch Rs. 1,500 crore to Rs. 2,000 crore.

An economic downturn could result in the sale at the right price a tough one, said the source. The fact that Siddhartha had pledged some of these assets to raise personal loans may make the transaction complicated, sources said. 

While pledging estates to a large private lender, the Coffee Day Founder, survived by wife Malavika and two sons, had pegged the value of plantations at Rs. 35 lakh per acre. “The price is much lower now,” sources added.  


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