DEATH, V.G. Siddhartha unfortunately attracted the
kind of publicity he had sought to avoid throughout
his life. The intensely private businessman, who had
built one of the best known consumer retail brands in
India, Café Coffee Day, had avoided drawing atten-
tion to himself. But even before his body with a blood
stained face and clenched fists was fished out from
the backwaters of Netravati river by local fishermen
at the break of dawn on July 31, his disappearance
36 hours ago, and the typed and signed letter he pur-
portedly left behind, put his life and business dealings
under scrutiny and triggered intense speculation.
The letter, which he had reportedly written two
days before disappearing, was addressed to the board
members and the CCD family. It said, “My intention
was never to cheat or mislead anybody, and I have
failed as an entrepreneur.” He blamed himself for
failing to create a profitable business model and also
blamed severe extraneous pressures from PE firms,
lenders as well as the tax department for taking an
extreme step.
From his days as a young and ambitious stock bro-
ker in Mumbai in the 1980s to building a conglomer-
ate over the next two decades, Siddhartha was always
a big picture man. His death has not only raised some
uncomfortable questions for corporate India but also
about his businesses. On the surface, while his listed
business – Coffee Day Enterprises (CDEL) – was fac-
ing severe cash flow problems and was highly lever-
aged, there seemed little reason for Siddhartha to
have taken such an extreme step. At a consolidated
level, his business was making profits, and the recent
sale of shares in the mid-sized IT firm Mindtree to
L&T had given the company enough cash to reduce
its debt to a more manageable level. The coffee re-
tailing operations seemed on a solid footing, but like
many businesses, it was facing a liquidity crunch.
There were businessmen who had far greater
debt problems, and Siddhartha’s businesses at least
seemed to have enough assets to cover the debt by a
good margin.
22 I BUSINESS TODAY I August 25 I 2019As days go by though, more evidence points to
Siddhartha having taken on debt in his private capac-
ity to buy land and invest in long gestation projects,
and angry lenders hounding him for quick returns.
There is also a political angle to the tale. Siddhartha
was the elder son-in-law of S.M. Krishna, former CM
of Karnataka, a former Union Minister and a for-
mer Congress stalwart who had recently joined the
BJP. But despite his father-in-law changing sides,
Siddhartha had close friendships with many Con-
gress politicians from Karnataka, including strong-
man D.K. Shivakumar. Close friends and prominent
business leaders from Bengaluru speculated that he
might also have got caught in the crossfire between
the two parties.
In the letter, Siddhartha’s also talked about an in-
come tax probe. Was he talking about the 2017 I-T
raids on his companies and his premises, which pur-
portedly uncovered undeclared income, or something
more recent?
Some of the answers will never come out – includ-
ing the exact role his political friendships played or
the kind of pressures he felt from the tax department.
But as more details are revealed, it is increasingly
apparent that despite his land assets (over 12,000
acres of coffee plantations as well as a SEZ), he had
borrowed to the hilt and was possibly unable to keep
good on his promises to his lenders and PE investors.
While his apparent suicide may have given his se-
nior management and family some additional time to
make good his promises, the problems are far from
over. But let us come to that part a bit later.THE BEGINNING
The only child of a wealthy family of coffee plant-
ers from Chikkamagaluru in Karnataka, Siddhartha
moved to Mumbai in the 1980s after completing his
Masters in Economics from Mangalore University, to
pursue a career in finance. His two-year stint with JM
Financial gave him enough insights into the world of
stock brokerage and the money in high inter-market
arbitrage. After returning to Bengaluru, Siddhartha
borrowed around `7.5 lakh from his father to set up
his own trading business, Sivan Securities, which
later became Way2Wealth Investment Consultancy.
A portion of the profits from Sivan was used to sys-
tematically buy coffee plantations across Karnataka.
By the early 1990s, Siddhartha aspired for more
as opportunities came along his way. By then he had
married Malavika, the daughter of S.M. Krishna.COVER STORY > V.G. SIDDHARTHA