VG Siddhartha Letter: Coffee Day Board Appoints Cyril Amarchand Mangaldas As Legal Counsel
The board of Coffee Day Enterprises has also appointed an interim Chairman and interim COO.
The board of Coffee Day Enterprises Ltd. has appointed law firm Cyril Amarchand Mangaldas as its legal counsel for matters related to its deceased founder VG Siddhartha.
Addressing the letter that was circulating on social media yesterday, the board of India’s largest coffee chain said it has taken cognizance of the statements pertaining to the financial transactions Siddhartha carried out without the senior management’s notice. It also mentioned that the authenticity of the letter was yet to be verified.
“While the authenticity of the letter is unverified and it’s unclear whether these statements pertain to the company or the personal holdings of Mr. V. G. Siddhartha, the Board took serious note of the same and resolved to thoroughly investigate this matter,” the board said in an exchange filing.
Siddhartha—son-in-law of former Karnataka Chief Minister SM Krishna—was found dead today morning near the banks of the Netravati in Mangaluru, a day and half after he was reported missing.
VG Siddhartha: Trapped By Debt
On Tuesday afternoon, a letter allegedly written by Siddhartha to the company board surfaced on social media. In the letter, he spoke about succumbing to pressures from lenders and tax officials and that after trying his best, he failed to create a profitable business model.
Siddhartha and other founders of Coffee Day have pledged over 75 percent of their holdings as collateral, according to filings. The debt burden had prompted him to start selling assets earlier this year. It included offloading his 20.4 percent stake in Mindtree Ltd., which led to the eventual takeover of the IT firm by Larsen & Toubro Ltd.
The VG Siddhartha Whodunit
The Coffee Day board said it has appointed SV Ranganath, the company’s non-executive director, as its interim chairman and Nitin Bagmane as interim chief operating officer.
A committee would also be formed to exercise powers previously vested with the chief executive officer. This body—which will include Ranganath, Bagmane and Chief Financial Officer R Ram Mohan—would explore opportunities to deleverage the Coffee Day group, the filing said.