VG Siddhartha
A file photo of VG Siddhartha, the founder of India's biggest coffee chain, Cafe Coffee Day Image Credit: AFP

New Delhi: He wanted to be an investment banker and had little interest in his family's coffee business. But a chat with the owners of German coffee chain, Tchibo, got V G Siddhartha to set up the Indian rival of Starbucks, before debt and tax woes allegedly led him to end his life.

Siddhartha, the founder of India's biggest coffee chain, Cafe Coffee Day, was confirmed dead on Wednesday, days after he went missing. A purported letter written by him indicated that pressure from banks, investor and tax authorities drove him to end his life.

Coming from a family that has a 140-year history of growing coffee, Siddhartha, around 60, initially dabbled in stock trading and wanted to work as an investment banker in Mumbai after completing his Master's degree in Economics from Mangalore University.

In 1984, he launched his own investment and venture capital firm Sivan Securities in Bangalore and began investing the profits from his start-up to buy coffee plantations in Karnataka's Chikmagalur district.

Initial days

Around this time, he also began taking interest in his family's coffee business. In 1993, he set up a coffee trading company called Amalgamated Bean Company (ABC) with an annual turnover of over Rs 6 crore and over the years it increased to over Rs 2,500 crore.

190731 VG Siddhartha
The 60-year-old Siddhartha had gone missing since Monday evening from the road bridge between Ullal and Mangaluru over the river around 7pm, his driver Basavaraj Patil told the police.(AFP photo) Image Credit: AFP

Inspired by a chat with the owners of Tchibo, a German coffee chain, Siddhartha decided to open his own chain of cafes in a country that had no formative cultural grounding in cappuccinos. He opened Cafe Coffee Day's first outlet on Bangalore's upscale Brigade Road in 1994 with a tag line 'A lot can happen over a cup of coffee'.

It's now the largest chain of coffee shops in India, a nation of tea drinkers, with 1,750 cafes in more than 200 cities, including outlets in Prague, Vienna and Kuala Lumpur. Coffee Day went public in 2015.

Siddhartha, currently has 200 exclusive retail outlets selling his brand of Coffee Day powder all over South India. ABC is also India's largest exporter of green coffee.

Expanding his business portfolio, Siddhartha ventured into IT sector and founded Global Technology Ventures Ltd that identifies, invests and mentors technology companies.

Investment firm

He also entered the financial sector with investment firm Sivan Securities Private Ltd. The company has three subsidiaries - Chetan Wood Processing Pvt Ltd, hospitality business Barefoot Resorts and timber trading - Dark Forest Furniture Company.

In 1999, Siddhartha was roped in by IT veteran Ashok Soota when Subroto Bagchi, Rostow Ravanan and KK Natarajan were putting together IT firm Mindtree.

He was once the largest shareholder of Mindtree but decided to cash out. In March this year, he sold out his 20.41 per cent stake in MindTree to Larsen & Toubro (L&T), making close to Rs 2,858 crores profit. That deal helped him repay his debt of about Rs 2,900 crore.

Trouble brewing

Son-in-law of former Karnataka Chief Minister SM Krishna, Siddhartha found himself in trouble in September 2017, when the Income Tax (I-T) department conducted raids at over 20 locations linked to him.

Siddhartha reportedly had been witnessing rising debts, especially in the last few years.

His Coffee Day Enterprises Ltd had seen net loss widening to Rs 67.71 crore in the fiscal year ended March 31, 2018, from Rs 22.28 crore loss in the previous year. This despite revenues climbing 59 per cent to Rs 122.32 crore.

He was reportedly in talks to sell his real estate venture Tanglin Developments Ltd to New York-based private equity giant Blackstone Group.

The MindTree sale had vastly improved his financial condition and the real estate deal would have further cut his debt. He was also in talks to sell Coffee Day Enterprises, where he held 32.75 per cent stake, to Coca-Cola for as much as USD 1.45 billion.

Body og Cafe Coffee Day founder
The body of Indian coffee baron V.G. Siddhartha is transported into an ambulance from the district Wenlock hospital after a post-mortem autopsy in Mangalore on July 31, 2019, before being brought to his hometown Chikmagalur for last rites. Image Credit: AFP

Unanswered questions

And so his sudden disappearance from Jappinamogaru, which is very close to Netravathi river and three kilometers from the sea, on Monday evening has left questions unanswered.

A letter by him to the CCD Board claimed that he was being pressured by "one of the private equity partners" forcing him to buy back shares, a transaction he had partially completed six months ago by borrowing a large sum of money from "a friend".

The letter also talked about "harassment" by I-T Department official, who initially attached his shares in Mindtree.

The I-T Department on its part refuted the charges made out in the letter saying the signature on it does not match with the record available with it.

His wife, Malavika Hegde, with whom he has two children, is on the CCD board.

"Company is professionally managed and led by a competent leadership team, which will ensure continuity of business," the CCD Enterprise said in a regulatory filing.

RIP Siddhartha: Some CCD outlets stay shut

Some outlets of the popular Cafe Coffee Day (CCD) chain in central Bengaluru remained shut on Wednesday as a mark of respect to its founder-chairman V.G. Siddhartha, who died under mysterious circumstances, a company source said.

RIP Sidhartha Cafe Coffee Day founder
An employee stands beside a portrait displayed to pay homage to coffee baron and founder of Cafe Coffee Day retail chain, V.G. Siddhartha, at the company's corporate office in Bangalore on July 31, 2019, after he was found dead in the waters of Netravati river. Image Credit: AFP

"Retail outlets in the city centre, including our main coffee 'the square' opposite the famous Cubbon Park are closed for the day as a homage to our founder-chairman along with our main office above the cafe," a CCD source clarified to IANS here.

While in Mumbai, company officials confirmed that all 50 Cafe Coffee Day outlets were functioning as normal. And they said the outlets will remain open during their regular hours till 11 p.m.

Earlier in the day, the source had told IANS that all the CCD outlets across the country would remain shut as a mark of respect to Siddhartha.

"CCD offices, including that of Coffee Global Enterprises and the Amalgamated Bean Coffee (ABC), have also been shut across the country," the source said on the condition of anonymity.

"A holiday has also been declared for the workers and employees of all coffee estates in the three coffee districts of Chikkamagaluru, Hassan and Kodugu in the southern state due to the sudden death of coffee king Siddhartha," added the source.

In Kerala there are 25 outlets -- six in Thiruvananthapuram, 14 in Kochi, and five in Kozhikode. We have been asked to go on with the business and hence we abided by that," said the CCD staff, who did not wish to be identified.

Abey Tellas, a professor at a leading college sipping his coffee at a outlet in Thiruvananthapuram, told IANS: "I was a bit surprised to see this outlet open. When I entered, it was business as usual. I thought about the founder of CCD, that it's a bit sad, he is no more."

Meanwhile, the board of Coffee Day Enterprises appointed S.V. Ranganath as its interim chairman, after the police in Mangaluru earlier recovered the body of its founding Chairman V.G. Siddhartha almost 36 hours after he went missing.

The board also decided to appoint Nitin Bagmane as the interim Chief Operating Officer (COO), a company statement said.