- Coffee baron VG Siddhartha built the iconic chain Cafe Coffee Day in India but the business had come under pressure in recent years.
- The company's net debt was over two and a half times its net worth at the end of March 2019.
- ANI, a news agency, put out a letter allegedly written by the founder VG Siddhartha before went missing on Monday night.
VG Siddhartha came from a coffee-growing family, which owned 15,000 acres of coffee estate in Chikmagalur in Karnataka. He launched the first Cafe Coffee Day (CCD) outlet on Brigade Road in Bengaluru in 1996. The chain currently has 1,750 outlets and over 60,000 vending machines spread over Nepal, Malaysia, Czech Republic, and Egypt, aside from 245 cities in India.
However, the business had come under severe pressure in recent years. The company's net debt was over two and a half times its net worth at the end of March 2019. A news agency ANI put out a letter, which it said was written by Siddhartha to his employees before he went missing.
Here's the full text off the letter as put out by the agency.
To our Board of Directors and Coffee Day Family,
After 37 years, with strong commitment to hard work, having directly created 30,000 jobs in our companies and their subsidiaries, as well as another 20,000 jobs in technology company where I have been a large shareholder since its founding, I have failed to create the right profitable business model despite my best efforts.
I would like to say I gave it my all. I am very sorry to have let down all the people that put their trust in me. I fought for a very 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 me to succumbing to the situation.
There was a lot of harassment from the previous DG Income Tax in the form attaching our shares on two separate occassions to block our Mindtree deal and taking 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.
I sincerely request each one of you to be strong and to continue running these businesses with a new management. I am solely responsible for all mistakes. Every financial transaction is my responsibility. My team, auditors, and senior management are totally unaware of all my transactions. The law should hold me and only me accountable as I have withheld this information from everybody including my family.
My intention was never to mislead or cheat anybody, I have failed as an entrepreneur. This is my sincere submission, I hope some day you will understand, forgive me and pardon me.
I have enclosed a list of assets and tentative value of each asset. As seen below our assets outweigh our liabilities and can help repay everybody.
Regards,
VG Siddhartha
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Coffee baron VG Siddhartha, the founder of India's iconic chain Cafe Coffee Day, is missing