Mumbai: The much-awaited probe report on the suicide of Café Coffee Day (CCD) founder V.G. Siddhartha is likely to reveal several related-party transactions over the past decade that has left a missing money trail of at least $350 million ( ₹2,593 crore), two people familiar with the matter said.
The transactions allegedly involved money being transferred from accounts of at least seven units of Coffee Day Enterprises Ltd (CDEL) to personal accounts of Siddhartha and entities owned by his family, according to an investigation report, the two people cited above said on condition of anonymity.
CDEL, which has 48 subsidiaries, had in August hired former deputy inspector general of the Central Bureau of Investigation Ashok Kumar Malhotra to investigate the contents of the suicide letter purportedly written by Siddhartha and scrutinize the company’s books of accounts. Malhotra has been assisted by Delhi-based Agastya Legal’s senior partner M.R. Venkatesh.
“The transactions were to mostly service accumulated debt, which in turn was incurred to pay back venture capital and private equity investors going all the way back to 2008. Siddhartha allegedly paid these risk investors as much as ₹1,800 crore as returns," said one of the two people.
Siddhartha provided his early backers such as Darby Overseas Investments Ltd, the private equity arm of Franklin Templeton Investments, and Sequoia Capital with annual returns of as high as 23%, mostly through loans, the person said, citing the investigation report.
“The promoter family was not involved in the business at the time of founder V.G. Siddhartha’s unfortunate demise. The promoter family and management are fully cooperating with the investigation but oblivious to its outcome as their priority is to keep the business running in a challenging environment and meet all stakeholder commitments, including 30,000 jobs associated with the group," a Coffee Day Group spokesperson said.