CCD owner-founder VG Siddhartha
CCD owner-founder VG Siddhartha

Bengaluru: Police and investigating agencies assisted by tax experts on Friday started looking into the possible reasons for the suicide of Café Coffee Day founder VG Siddhartha even as post-mortem confirmed that the business tycoon had died due to drowning.

While foul play has been ruled out, investigation agencies are trying to pry open the web of transactions, debts and investments made by Siddhartha.

Reports that have started emerging indicate that Siddhartha had brewed not just coffee, but also a terrible cup of black coffee in the form of borrowings over the last few years.

Police have also begun combing the company’s financial books for having a close look at role played by private equity partners and lenders. In a letter allegedly written by Siddhartha just before his suicide, he had blamed private equity partners for putting “tremendous pressure” on him. He had also blamed the “previous DG” of the income tax department with “a lot of harassment.”

Central to the investigation is the role played by private equity firms. For this, the police plan to question the CFO of Coffee Day Enterprises and financial advisers to the company. The chief financial officer is currently in Tokyo and he and other financial advisers have been asked to appear before police as part of the inquiry.

Two teams led by ACP (Mangaluru South Division) T Kodandaram are working on the case. A team has been constituted in Bengaluru to look into the technical aspects of the investigation.

What has stumped the investigation team are reports that Siddhartha’s total debt may have touched a whopping Rs 11,000 crore. Topping the debt chart is Coffee Day Enterprises Limited (CDEL) with reported a debt of Rs 6,547 crore on March 31, 2019. But his group’s four other private holding companies had outstanding debts of over Rs 3,522 crore as of fiscal 2018-19.

But Siddhartha and two other CDEL directors had given personal guarantees towards loans to the tune of only Rs 1,028 crore. Which means the obvious - that he got ensnared in the vicious grip of private money lenders.

Agencies that retrieved data from stock exchanges and the Ministry of Corporate Affairs reported that VGS and the four promoter companies of CDEL had mortgaged shares worth over Rs 3, 522 crore to various lenders since 2014.

This was done to raise fresh loans. But where this money was used is not certain as some of the debts were not retired and remained active on the books.

Sources say that someone with a debt pile of nearly Rs 11,096 crore would have been undergoing tremendous and unexplainable pressure. This may have forced Siddhartha to commit suicide.

“He had crossed the debt bridge too far for a safe return,” a source said. In fact, in his last letter, Siddhartha mentioned that he was unable to cope with the company''s mounting debt.

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