PRAMESH S JAIN
Highlights :
* Is Siddhartha penned down and commited suicide!
* Siddhartha letter allegations to IT department on previous DG Income Tax harrasement is baseless and IT officials has refuted as the sign in the letter is not Siddhartha sign.
* More than 200 personnel has been deployed in the search and rescue operation.
* NDRF,NAVY,Coastal guard with Fisherman are conducting search operations from past 30 hours still he is missing.
* DG&IGP of karnataka Neelamani N Raju is monitoring the situation and overseeing the search operation.
* Search has been intensified in the Nethravathi river and all the lodges and hotels by the Mangaluru Police.
* CCTVs are being analysed.
* Investigation is conducted in all angles.
* Central and state government is giving all support and help in search and rescue operation.
* Overnight search operation is continued with the arrangements of full lightings.
* Sandeep Patil Commissioner is supervising the whole search operations physically.
V G Siddhartha, the founder of India’s largest coffee chain, Cafe Coffee Day,went missing on Monday night en route to the coastal Karnataka city of Mangaluru,with a letter purportedly written by him showing he was under “tremendous pressure from lenders.
Cafe Coffee Day (CCD) founder and former Karnataka Chief Minister,SM Krishna’s son-in-law,VG Siddhartha,is suspected to have jumped off a bridge in Mangaluru on Monday night.
V G Siddhartha,the founder of popular beverage chain Cafe Coffee Day and Former Karnataka Chief Minister SM Krishna’s son in law,has gone missing since Monday evening.
He was last seen on the bridge over the Netravati river in Mangaluru,where he had instructed his driver Basavaraj Patil to drop him.
Siddhartha had left from Bengaluru for Sakleshpur in Hassan district in a car on Monday afternoon,but on the way asked his driver to go towards Mangaluru, the police said.On reaching the bridge, he alighted from the car and told his driver that he was going for a walk.
The report said that one of the police officers confirmed that a person was suspected to have jumped off the Ullal bridge, which is built across the River Nethravathi, at 9pm.A search operation is now underway while his mobile phone is reported to be switched off.
Siddhartha had been in the news earlier this year that IT company Mindtree found certain irregularities in disclosures made by him.Siddhartha had sold his stake in Mindtree to L&T, and it had taken action against him according to the law.
On the pledge disclosure issue,there was a disclosure that he made at certain point of time of all the pledge.At that point of time, there were some irregularities in his disclosures.Our board and audit committee evaluated it and handled it as per the rule that were prevailing at that point of time,Mindtree CEO Rostow Ravanan had told back then.
In this regard, the report said,while citing sources,a complaint against Siddhartha alleging insider trading during his stint at Mindtree was also filed with the Securities and Exchange Board of India (Sebi) by an anonymous person.
The report added that the complaint filed against Siddhartha had alleged that he and his firm Coffee Day group had sold shares that were pledged before various financial institutions.
Further,the sources told that the complaint argued that if these shares were pledged,a disclosure should have been made about these pledges under the Sebi Insider Trading Regulations and Sebi Takeover Regulations.
Commissioner of Police,Mangaluru, Sandeep Patil, told media persons that Siddhartha left Bengaluru yesterday and was travelling to Sakleshpur.On reaching Netravati Bridge,he got down from the car and asked his driver to move ahead and wait as he wanted to take a stroll,Patil said, adding that he went missing soon after.We used the dog squad and they stopped at the middle of the bridge.We are taking help of local fisherman to search the river. Everyone he had last spoken to are being contacted for relevant information the police commissioner said.
He (Siddhartha) asked the driver to wait till his arrival.When he did not return even after two hours,the driver approached the police and lodged a missing complaint,The investigation is on,the cops will prepare a report shortly.Based on the complaints given to us we have started the search operations we have deployed all our search and rescue personnel we have also brought in expert divers from the navy Deputy Commissioner of Dakshina Kannada district Senthil Sasikant Senthil told reporters.
Search and rescue official told media persons,We started the rescue operation last night the water currents are very strong so it is hard to find the person from where he jumped.
Another search and rescue official told reporters,usually we find the body at the end near Kumta and Murdeshwar sometimes we find the body after 24 hours sometimes we don’t find the body at all he said.In the rainy season we need specially trained personnel now the speed of the currents is very high we need to steer our boats carefully.
Coffee tycoon friend said,Siddhartha was an inspiration for all coffee plantation owners we are very hurt to learn that he has been missing we want him to return safely and continue to be an inspiration for coffee growers.
Siddhartha’s associate said,He had more than 50,000 employees working for him he ensured that they were all paid really well he had even been trolled for paying such high salaries for odd jobs but he insisted that people should not get donkey’s salary for monkey’s work he added.
Siddhartha’s employees said I had worked for coffee day group for four years I have been working for a private company for the last 7-8 years Siddhartha took care of us very well we hope that he is safe he added.
Siddhartha’s friend told,I was very sad to hear the news I felt very sad and came here immediately the cops had blocked the road but I requested them and came here I met his associates and found out what had happened I cannot believe that he could be dead.He was a very dynamic person if coffee has any value in the open market it is due to him he added.
According to the driver,Siddhartha left Bangalore at 11 am on Monday and kept changing his destination from Chikkamangaluru to Hassan to Sakleshpur and finally Mangaluru.
Driver Basavaraj said in his statement,I have been working for him for the last three years.On Monday I reported for duty at his residence at 8 am and drove him to his Vittal Mallya office and returned home at 11 am.At 12:30 pm he asked me to drive towards Sakleshpur (222 kilometres away). He soon changed his mind and asked me to drive towards Mangaluru instead.Just before we were about to enter the city,he asked me to take a left as he wanted to visit some site.When we reached the Kerala highway,he asked me to stop at the bridge and drop him there.I was told to wait on the other end.After an hour,around 8 pm, I called him but his phone was switched off.Then I called his son,who also tried calling him.I later filed a complaint after we couldn’t trace him, the driver said in his complaint.
A massive search operation involving teams of the National Disaster Response Force (NDRF), Coast Guard,Home Guard, fire services and coastal police was launched to scour the waters under a bridge across the swollen Nethravathi river where the 60-year-old businessman was reportedly last seen, but didn’t yield any result.
“Coast Guard deploys ship off old Mangaluru port to search for CCD founder”
Indian Coast Guard on Tuesday said it has deployed a ship off the old Mangaluru port to search for VG Siddhartha,the founder of the Cafe Coffee Day.The Coast Guard said it has also pressed in three diving teams in the search operations.ICGS Rajdoot has been tasked to patrol off the old Mangaluru Port and maintaining a sharp lookout very close to harbour mouth, while ICGS Savitribai Phule has been kept on standby.
Siddhartha, the son-in-law of former Karnataka chief minister SM Krishna, was reported to have gone missing after he left from Bengaluru on Monday night,police said.
“Air Cushion Vehicle (H-198) is undertaking search in Nethrvathi River and providing support to CG diving teams.Three diving teams,along with the district disaster relief team,has been deputed to carry out search for the missing person,the Coast Guard said in a statement.
Siddhartha was headed for Sakaleshpur, Karnataka, but on the way,he had asked his driver to go towards Mangaluru,according to the police.
On reaching a bridge over the Netravati river in the Kotepura area in Dakshina Kannada district,he got down from the car and told his driver that he was going for a walk.It was then the driver contacted the police.
“King of coffee VG Siddhartha, wife did not draw salaries”.
VG Siddhartha,the Chairman and Managing Director of Coffee Day Enterprises,did not draw any salary.As per the company’s annual reports between 2015-16 and 2017-18,the two promoters drew ‘nil’ compensation from the company. Siddhartha,along with other non-executive directors of the company,were not paid any remuneration during FY16-18.
The non-executive directors who did not draw their salaries include Siddhartha’s wife,Malavika Hegde,and the Chief Executive Officer of KKR India Sanjay Omprakash Nayar.Notably,KKR Mauritius PE Investments is the second biggest overseas corporate investor in Coffee Day Enterprises.
Siddhartha,who founded the company in Bengaluru,has been missing since Monday evening.He was last seen near Netravati dam site close to Mangalore.In what is purportedly his suicide note,Siddhartha said that he had “failed to create the right profitable business model”despite his best efforts.
All the coffee day employees were given holiday after the mystery of CCD founder VG Siddhartha missing.
“Siddhartha allegedly penned a letter to his employees before he went missing.”
In the letter,Siddhartha wrote he was under pressure from a private equity partner and other lenders.Siddhartha also alleged that he was harassed by the previous Directorate General,Income Tax which left him facing a “liquidity crunch”.I am sorry to let down all the people that put their trust in me,I fought for a long time but today I gave up,he added.Every financial transaction is my responsibility.the law should hold me and only me accountable, he further added.
Shares of Coffee Day Enterprises,which operates the coffee chain outlets,dropped 20 per cent on Tuesday,eroding Rs 813 crore from its market valuation.The stock tumbled 19.99 per cent to Rs 154.05 its 52-week low as well as its lower circuit limit — on the BSE.
The board of Coffee Day Enterprises met on Tuesday,seeking to calm investors.The board said it was assessing the situation in the wake of the disappearance of its founder and chairman,and formulating appropriate steps to ensure business operations were unaffected.It also for the first time admitted that Siddhartha had written a letter addressing the board about his ongoing predicaments regarding the liquidity crisis and alleged high-handedness of the Income-tax department,among others.In that letter, Siddhartha had also taken full responsibility for the trouble faced by the group.The letter also detailed the assets of the group,though it remained conspicuously silent about the liabilities and his personal financial transactions.
The I-T department,however,strongly refuted the allegations of harassment.It also cast doubts over Siddhartha’s signature used in the document.The authenticity of the note is not known and the signature doesn’t tally with VG Siddhartha’s signature as available in the annual reports,the department said in a statement.The department also alleged that the I-T raids on a prominent political leader in Karnataka had led to unearthing of concealed financial transactions done by the group.
In his letter,Siddhartha had alleged that the company had faced a lot of harassment from the previous director general (DG) of income tax, who had attached Mindtree shares twice to scuttle its sale deal.
“Income tax officials releases a press release and refuted the allegations : “
A note said to be written by Shri.VG Siddhartha (VGS) of CCD is doing the rounds.Among others it was mentioned in the note about the attachment of Coffee day shares by the Income Tax department. The authenticity of the note is not known and the signature does not tally with Shri VGS’s signature as available in his annual reports.The investigation in the case of Shri VG Siddhartha and Cafe coffee day (CCD) arose from the search in the case of a prominent political leader of Karnataka.It is based on the unearthing of a credible evidence of financial transactions done by the CCD in a concealed manner,the tax department said in a press statement.
In January, the tax department had attached shares of information technology firm Mindtree worth about Rs665 crore, owned by Siddhartha and Coffee Day Enterprises. The move came 16 months after the tax department conducted searches at various offices of Siddhartha, following his talks with private equity investors for sale of his stake in Mindtree.
In March Siddhartha garnered about Rs3,200 crore by selling his 20.32% stake in software services company Mindtree Ltd to Larsen and Toubro Ltd (L&T), and two CCD affiliate firms (Coffee Day Enterprises Ltd and Coffee Day Trading Ltd).The deal helped Siddhartha repay his debt of about Rs2,900 crore,vastly improving his financial condition.
Following is the text of press release from the Office of Principal Chief Commissioner of Income Tax, Karnataka and Goa, Bangalore.
1. A note said to be written by Shri. VG Siddhartha (VGS) of CCD is doing the rounds.Among others it was mentioned in the note about the attachment of Coffee day shares by the Income Tax department. The authenticity of the note is not known and the signature does not tally with Shri VGS’s signature as available in his annual reports.
2. The investigation in the case of Shri VG Siddhartha and Cafe coffee day (CCD) arose from the search in the case of a prominent political leader of Karnataka.It is based on the unearthing of a credible evidence of financial transactions done by the CCD in a concealed manner.
3. A person holding citizenship of Singapore was also covered in the search action.He was found with unaccounted cash of Rs.1.2 crores and admitted that the cash belong to Sh. VG Siddhartha.
4. In the Search action,after considering the evidences gathered by the department, Shri.VG Siddhartha admitted the unaccounted income of Rs,362.11 Crores and Rs.118.02 Crores,in the hands of Shri. VG Siddhartha and M/s Coffee Day Enterprises Ltd respectively in the sworn statement.
5. Shri Siddhartha,subsequently filed the Return of Income but did not offer the above undisclosed income as admitted in the sworn statement in both the cases except sum of around Rs.35 Crores in his individual case.Further one of the group company M/s Coffee Day Global Ltd has not paid the Self-Assessment Tax of Rs. 14.5 Crores on the returned income. M/s Coffee Day Enterprises Ltd did not offer the admitted income in its part.
6. On 21st January,2019,major newspapers had reported that Shri VG Siddhartha is planning to sell the equity shares of Mindtree Ltd held by him and his company immediately.Based on this report,an immediate verification of the facts were carried out.It was found that the assessees Shri VG Siddhartha,M/s Coffee Day Enterprises Ltd and M/s Coffee day trading Itd together held nearly 21% of shareholding in Mindtree Ltd.It was also gathered that the deal for sale of shares are set to be finalised in January 2019.
7. The tax effect along with interest and
penalty based on the outcome of the search action runs in to hundreds of crores.On the other hand,there was no application filed by the assessees concerned before the assessing officer as required under the statutory provision before transferring any assets when the Income tax proceedings are pending.
8. In order to protect the interests of revenue, the provisional attachment of 74,90,000 shares of Mindtree Limited owned by Shri V G Siddhartha and M/s Coffee Day Enterprises Ltd u/s 281B of the Income Tax Act was made(though they together held 2,29,31,518 shares).This action is a normal requirement to protect the interests of revenue.
9. Subsequently,Shri Siddhartha filed a request letter to release Mindtree shares and in turn offered other security of shares of M/s Coffee Day Enterprises Ltd against the expected demand.This was accepted and the attachment of Mindtree shares were revoked on 13.02.2019 with specific condition that the sale proceeds will be utilized only for repayment of loans availed against the Mindtree Ltd shares by opening escrow account and the remaining balance will be provided for attachment u/s 281B against the tax liability to arise.The alternate attachment of 46,01,869 unencumbered shares and 2,04,43,055 encumbered shares of M/s Coffee Day Enterprises Ltd u/s 281B was also made on 13.2.20 19 and 14.2.2019.
10. The assessees had transferred the Mindtree Ltd shares to M /s L&T Infotech Ltd 28.04.2019 and received around Rs.3200 crores.Out of this consideration, the assessee had repaid loan of around Rs. 3000 crores and paid expenses related to transfer of 154 crores and the balance of Rs.46 crores was paid towards first instalment of Advance Tax of estimated MAT liability of around Rs.300 crores in the case of shares of M/s Coffee Day Enterprises Ltd. As against the balance MAT liability of Rs.250 crores and tax liability arising based on search findings to the tune of approx. 400 crores,the provisional attachment made by the department is less than 40% of the likely tax liability.
11. The provisional attachment was made to protect the interests of revenue out of the income admitted by assesse based on credible evidence gathered in the search action.The Income Tax department has acted as per the provisions of Income Tax Act.
BJP lawmaker from Karnataka Shobha Karandlaje met Home Minister Amit Shah on Monday and requested him for central assistance in tracing the missing V G Siddhartha, a resident of her constituency. The BJP MP has also written to Union Defence Minister Rajnath Singh seeking help to trace V G Siddhartha.
Meanwhile,Congress leader,U T Khadar who was at the site of the search operation said,I was shocked when I got the news.The police commissioner has ordered a search operation.It is being carried out with support from locals a group of policemen are seen on a bridge scanning the river below.Another group of policemen are on inflatable boats scouring the waters.We are very concerned that our friend,a very good person and someone who has given jobs to thousands of people is missing since Monday night, Khader told media persons.
DK Shivakumar,Former Water resources Minister of karnataka said,The letter purportedly written by Shri VG Siddhartha which is circulating is dated July 27th.I received a call from him on the 28th asking if we could meet up.It’s unbelievable that a courageous man like him would resort to this.However,I find this utterly fishy and urge that a thorough Investigation be conducted into this matter Shri Siddhartha and his family were closely known to me for decades now he tweeted.
Karnataka Chief Minister BS Yediyurappa and Congress leaders as,Siddaramaiah DK Shivakumar and B L Shankar visited former Karnataka chief minister S M Krishna at his residence in Bengaluru early Tuesday morning.
The Income Tax had raided Siddhartha’s offices in September 2017.
Siddhartha had sold his 20 per cent stake in consultancy firm Mindtree to Larsen and Toubro for Rs 3,300 crore in March this year.
It is alleged that he was reportedly in talks with Coca-Cola to sell his flagship chain. He founded Cafe Coffee Day in 1993 and it has over 1,500 outlets countrywide.
