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MAN BEHIND CAFE COFFEE CHAINS

V.G. SIDDHARTHA – Was the man whose mind was behind the
successful coffee chains in India. He was a man less famous by his
name but his hard work speaks it all.

He could have easily survived with the 350 acres of the estate his
family-owned, but instead, he was too ambitious and decided to
start something that appealed to him, something created by him,
something on his own.

His full name was Veerappa Gangaiah Siddhartha Hegde, started


his career as a trainee trading in Indian stock market at JM
Financial under the tutelage of Mahendra Kampani in 1983, after
completing his masters’ degree in Mangalore University.

He bought Sivan Securities in 1984 and turned it into a highly


successful investment banking and stockbroking company.
It was renamed Way2Wealth Securities in 2000.

In 1992, Siddhartha started his coffee business – Amalgamated


Bean Company Trading, an integrated coffee business which
ranges from procuring, processing and roasting coffee beans to
retailing of coffee products.
The company’s revenue stands at Rs 2,016 crore for FY18.

After the success of the coffee venture, Siddhartha launched India’s


first coffee café — Café Coffee Day — on Brigade Road, Bengaluru
in 1996. Internationally, CCD outlets are present in Vienna, Czech
Republic, Nepal, and Egypt.

He also served on the board of directors of Mindtree, GTV, Liquid


Krystal, Way2wealth Brokers, Coffee Day Natural Resources, and
Way2wealth Securities.
Cafe Coffee day Owner Death:
On Tuesday 30th July 2019, Cafe chain Coffee Day Enterprises has
confirmed that its Managing Director VG Siddhartha has been
missing since Monday 29th July and that the company with the help
of concerned authorities are tracing him.

On, 29th July 2019 Siddhartha had told his driver that he was going
for a walk near the bridge and asked him to wait at a distance.
Meanwhile, a fisherman had claimed that he saw someone jumping
off the bridge. When he did not return even after two hours, the
driver approached the police and lodged a missing complaint.
Shares of Coffee Day Enterprises dropped 20 percent and hit the
lower circuit limit as well as 52-week low of Rs 154.05 as a piece on
BSE after news surfaced that its founder has gone missing.

On Wednesday, 31st July, 2019 his body was found at the Hoige
Bazaar beach by local fishermen who informed the police.
The body had washed ashore near Ullal and was fished out by local
fishermen.

VG Siddhartha left a letter allegedly wrote to Coffee Day


Enterprises board, he says that he “failed to create the profitable
business model despite my best efforts.”
He goes on to say: “I would never cheat or mislead anybody
intentionally, I have failed as an entrepreneur.”
News reports say the man who made coffee popular in a nation of
tea-lovers referred to three main issues in his letter to the
board: “pressure from private equity partners forcing him to buy
back shares”, “harassment from the previous DG income tax ”, and
“tremendous pressure from other lenders”.
All the issues center on the liquidity and debt that Siddhartha and
Coffee Day Enterprises were facing, and which ultimately
culminated in the entrepreneur selling his stake in Mindtree earlier
this year.
Downfall of Cafe Coffee Day

Let’s discuss about major reasons of the DOWNFALL of CCD

BSR associates was their main auditor who used to audit their
outlets.
The auditor wrote a letter to the shareholders of CCD that they have
not audited 40 subsidiaries of Cafe coffee day.

This was the reason the shareholders backed off, and denied to
provide further funds.

Meanwhile, the Income Tax (IT) department raided on Cafe Coffee


Day (CCD) retail chains and found about Rs 362 crore concealed
income.

VG Sidhartha in his letter mentioned that Income tax department


was attaching their shares on two separate occasions to block their
Mindtree deal and then taking the position of their Coffee Day
shares, although the revised returns have been filed by them.
Because they were in such a heavy debt, they started taking short
term loans in form of debentures with high interest rates to pay off
their long term debt.
This resulted in more heavy debt burden.

COCA-COLA BUYING CCD?


(NEWS)
The US beverage giant COCA-COLA is eyeing a significant
foothold in the cafe business space in India.

Soft drinks maker Coca-Cola has initiated pre- talks with Cafe
Coffee Day (CCD) before the death of the founder V.G. Sidhartha to
acquire a substantial stake in India’s largest coffee chain. If the deal
is initiated, it would be Coca Cola’s second major investment.

Now, the promoters of the company plan to restart the pending talks
with COCA-COLA for selling off their significant stake in Cafe
Coffee Day(CCD).

A spokesperson for Coca-Cola has refused to comment on this


news.
And calls it what he termed “speculative news”.
Latest Updates:
As you know, Cafe coffee day chain is all over debt and also being
presurized by the lenders.

Coffee Day Enterprises being the parent company of Sical


Logistics, has decided to sell the entire stake in the company to
ensure the debt removal of the company.

Report says, Coffee Day Enterprises has also hired ICICI Securities
as adviser for the potential transaction.
As soon this news spread over the internet, the share price of sical
logistics and also share price of coffee day enterprise jumped to the
highest and locked upon the upper circuit of the day.