Probe into VG Siddhartha's death may find Rs 2,000 crore missing from CCD books: report

Prepared by former CBI official Ashok Kumar Malhotra, the draft report could give details of how funds worth up to Rs 2,000 crore went missing from Coffee Day Enterprise's accounts 

Late CCD founder VG Siddhartha Late CCD founder VG Siddhartha

A probe into debt-laden Coffee Day Enterprises Ltd (CDEL) is likely to reveal that at least Rs 2,000 crore ($270 million) is missing from the company's accounts, according to a Bloomberg report. The investigation, which was initiated by the company's board after the death of founder V.G. Siddhartha, is likely to be tabled before it by early April.

Prepared by former CBI official Ashok Kumar Malhotra, the draft report, running more than a hundred pages, could give details of how funds worth up to Rs 2,000 crore went missing from the account books.

The month-long investigation examined the financial transactions of CDEL, which runs a chain of Cafe Coffee Day restaurants in India, and its dealings with some of the private entities of Sidhhartha over the last few years, the report said.

A source close to the matter told Bloomberg that the report is in its final stage and the precise details could change before its release. The missing funds could total more than Rs 2,500 crore, one person said.

"The investigation report is still a work in progress, and not finalised," a spokesman for the company was quoted as saying. "The board of directors and the company are unaware of its content at this point of time. Hence it would be premature to speculate on the investigation findings."

Commenting on the media report, CDEL, in a filing to exchanges, said that its board has not received the said investigation report and is unaware of the contents published in various news portals/papers.

"The investigation is still on and it will take some more time due to coverage of as many as 48 subsidiaries," CDEL said in filing to exchanges on Tuesday.

The company, however, confirmed that it had appointed former CBI DIG Ashok Kumar Malhotra, assisted by a team of legal professionals under M. R. Venkatesh from Agastya Legal LLP, to investigate the circumstances leading to statements made in the letter of former Chairman late VG Siddhartha dated July 27, 2019 and to scrutinise the books of accounts of the CDEL and its subsidiaries.

The sudden death of the 59-year-old founder last year stunned India's business community.  In his last letter to CCD board, Siddhartha had said that he had "given up" in the face of pressure from one of the private equity partners to buy back shares. "I fought for a long time but today I gave up as I could not take any more pressure from one of the private equity partners forcing me to buy back shares, a transaction I had partially completed six months ago by borrowing a large sum of money from a friend. Tremendous pressure from other lenders led to me succumbing to the situation," Siddhartha wrote in his alleged last letter.

Siddhartha also talked about "harassment from the previous DG income tax" where he was blocked from selling his Mindtree shares earlier this year. "This was very unfair and has led to a serious liquidity crunch," he wrote.

By Chitranjan Kumar

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