Siddhartha's letter alleges harassment by PE firm, I-T

V.G. Siddhartha, chairman of Coffee Day Enterprises Ltd. (Reuters)

The Coffee Day Enterprises chairman and founder V G Siddhartha, before disappearing had purportedly written a letter to the board alleging harassment by various people.

In the letter, Siddhartha also said that his intention was never to cheat or mislead anybody and that he had failed as an entrepreneur.

“I would like to say I gave it my all. I am very sorry to let down all the people that put their trust in me. 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,” Siddhartha said, alleging harassment.

Siddhartha also blamed previous Director General of Income Tax (Karnataka and Goa region) for harassment. He said, “It came in the form of attaching our shares on two separate occasions to block our Mindtree deal and then taking a position of our Coffee Day shares.”

Sources that DH spoke to within the company as well as among the friends of Siddhartha, confirmed the authenticity of the letter.

Multiple sources, which include close friends and acquaintances of Siddhartha, confided to DH that the PE firm that was forcing Siddhartha to buyback the shares was KKR India, whose CEO Sanjay Omprakash Nayar sits on the board of the Coffee Day Enterprises. Nayar, according to the sources, was supported by yet another board member in Coffee Day Enterprises.

“Both of them were forcing him to buy back the shares. And he had complained to me about it two weeks back,” a close friend of Siddhartha, who he had met 15 days ago, told DH.

KKR declined to comment on the specific queries sent by DH. However, in a statement sent to the press, the private equity firm said: “We have seen the statement that Coffee Day Enterprises has made to the stock exchanges. We are deeply saddened by the developments and our thoughts are with his family at this time. We believe in VG Siddhartha and had invested in the company about 9 years ago.”

The company said that it had sold approximately 4.25% (of our total holding of approximately 10.3% in the company) in February 2018 on the stock exchange and have not sold any shares before or after.

Another board member, who had been supporting the KKR chief in this pursuit, didn’t respond to multiple calls, messages and mails by DH.

On the other hand, the Income Tax department has denied any kind of harassment and questioned the validity of the signature in the letter.

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