Siddhartha suicide: Rs 2,000 cr 'missing' from accounts, family to sell assets to repay dues

Around 10,000 acres of plantations might be put on sale to repay the dues

FILES-INDIA-COFFEE-BUSINESSMAN-CRIME-LAW-MISSING [File] V.G. Siddhartha single-handedly took Indian coffee to the global stage | AFP

Almost eight months after the shocking suicide of Coffee Day founder late V.G. Siddhartha, a probe initiated into the financial dealings of the company and dozens of private companies owned by the entrepreneur has reportedly found anomalies amounting to Rs 2,000 crore. The probe report is in the last stages and is expected to be submitted soon. 

As per various media reports, the probe, headed by retired CBI top official Ashok Kumar Malhotra, has found that around Rs 2,000 crore ($270 million) have gone missing from the accounts. Soon after his death in July 2019, a letter, puportedly written by Siddhartha before his suicide, had surfaced in which he had admitted to have created massive debts. He complained that he was facing rising pressure from lenders and tax authorities. Reportedly, the probe report may also highlight “certain balance sheet anomalies” as the cause for Siddhartha’s suicide.

The investigation report, commissioned by the board of directors, may point towards a series of related party transactions involving Coffee Day Enterprises and private entities of the late founder over the past few years. The draft report details personal guarantees by Siddhartha for loans taken by Coffee Day, and his unsecured loans at high interest rates from local money lenders, a Bloomberg report said. 

Meanwhile, his family is planning to sell off his personal assets, including around 10,000 acres of plantations to repay the dues. According to The Economic Times, a complete sale of plantations may fetch Rs 1,500-2,000 crore, they added, and talks are on with family offices for the sale. The fact that Siddhartha had pledged some of these assets to raise personal loans, however, is likely to make the transactions more complicated, the report added.

The family is also in talks to sell stakes held by Siddhartha in a few private enterprises—such as a pharma platform RL Finechem—to unlock more liquidity. 

A related issue is that coffee estates owned by Siddhartha and several employees had been used as collateral for bank loans. The probe report found that valuations for properties were inflated to get the loans. 

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