V.G. Siddhartha, the Café Coffee Day (CCD) founder who has gone incommunicado since Monday evening, was under tremendous financial stress since the past couple of years. Many people, who had known and worked with him for years felt that the stress had taken a heavy toll on him.
According to a market insider, who wished not to reveal his identity, Siddhartha’s losses mounted especially after the IL&FS crisis, which made his financial condition stressful as he had a lot of exposure to the stock market. “Siddhartha, who started off as a coffee planter from Chikkamagaluru in Karnataka, had also set up a stock broking company, Way2Wealth, which dealt in stock-trading. Being son-in-law of former external affairs minister S.M. Krishna, he was also involved in many land dealings of the latter. The exposure to the stock market took a toll on his finances,” revealed the expert.
In January this year, the Income Tax Department had attached Rs 74.90 lakh worth of shares from IT services company Mindtree. Of this, Rs 22.20 lakh worth shares were held by Coffee Day Enterprises in Mindtree and Rs 52.70 lakh worth shares by its promoter Siddhartha. Coffee Day Enterprises and Siddhartha had recently sold off their 21 per cent stake in Mindtree to engineering firm L&T.
According to Kris Lakshmikanth, founder and CEO of executive search firm Head Hunters India Limited, Siddhartha's business took a downward spiral after he diverted money from CCD business to the stock market. "Though he had a good business running in the form of Café Coffee Day, he was diverting money to the stock market from CCD. He lost a lot of money and suffered losses. His greatest mistake was to divert the money to the stock market from an otherwise smooth running business of CCD. He did not discuss much about his stock dealings as it was more of a personal investment,” Lakshmikanth told THE WEEK.
also read
Siddhartha made it a point to keep a low profile and was a publicity shy person and hardly shared thoughts with people even in his close circles. People who have known him for years know him to be a humble and quiet person, who, for most of the time, kept to himself and hardly discussed his issues with them.
“Due to his humble and pleasing personality he was able to get good professionals to run the CCD business. These professionals helped him grow his business. I recall meeting him two-three times, and found that he was a thorough gentleman who was able to attract good professionals at the senior level due to his personality," recalled Lakshmikanth
Siddhartha was last seen, probably by his driver who dropped him at the Netravati river bridge near Mangaluru in Karnataka. He has been missing ever since.
