V G Siddhartha's firm MACEL owes undisclosed nearly Rs 2,700 crore to Coffee Day Enterprises Limited

Mysore Amalgamated Coffee Estates Limited (MACEL), a privately-owned entity by late V G Siddhartha, owes an undisclosed Rs 2,693 crore to the Coffee Day Enterprises Limited (CDEL).

The MACEL owes Rs 3,535 crore to subsidiaries of Coffee Day Enterprises as of July 31, 2019, of which only Rs 842 crore was accounted for in the books of Coffee Day Enterprises on March 31, 2019, a probe revealed.

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"Therefore, a sum of Rs 2,693 crore is the incremental outstanding that needs to be addressed," the probe has said.

The probe was headed by Ashok Kumar Malhotra, retired DIG of Central Bureau of Investigation (CBI) and assisted by law firm Agastya Legal.

Steps are being taken by subsidiaries of CDEL, for recovery of dues from MACEL, the company said.

"The board authorised the Chairman to appoint an ex-judge of the Supreme Court or the High Court, or any other person of eminence, to suggest and oversee actions for recovery of the dues from MACEL and to help any other associated matters," it added.

Siddhartha's wife Malavika Hegde, who is also a director at the Coffee Day Enterprises, in a letter to employees said that she will fully co-operate with the board and the authorities on this.

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"While it recounts the founder's valiant efforts to build Coffee Day, the report also highlights certain transactions between his publicly listed companies and his private entities. I am fully aware of the requirements and responsibilities in this regard and will fully co-operate with the Board and the concerned authorities for a corrective course of action," the letter by Malavika said.

Siddhartha was found dead in early August 2019, and many suspect that he had died by suicide.

The probe further gives clean chits to Income Tax Department and the private equity firms, who Siddhartha, in his parting letter had alleged of harassment.

"We have not been provided with any documentary evidence to draw an inference that there may have been any advertent or inadvertent harassment from the Income Tax Department," the report said.

The probe also highlighted severe liquidity crunch at the Coffee Day Enterprises in build-up to Siddhartha's death.