Wednesday 01 February 2023

Coffee Day Enterprises to unveil results of the investigation on Siddhartha’s death

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MILAN – Coffee Day Enterprises Ltd (CDEL), the parent company of India’s leading chain Café Coffee Day, on Thursday said a report is likely to be released shortly on the investigation into the circumstances that led to alleged suicide of the company’s founder and chairman V G Siddhartha.

In a filing to stock exchanges, the company said it was confident of the future ahead despite the recent developments and has received unconditional support from its employees, shareholders and partners.

Siddhartha was confirmed dead on July 31, 2019 after his body was found in the Netravati river in Dakshina Kannada district of Karnataka, a day after he went missing.

CDEL founder Siddhartha had written a purported letter dated July 27 alleging harassment by the income tax department.

Last August, retired CBI DG Ashok Kumar Malhotra was appointed to investigate into the circumstances leading to statements made in the letter of the Siddhartha, and to scrutinise the books of accounts of the company and its subsidiaries.

“The said assignment is under progress and has taken long time due to coverage of as many as 48 subsidiary companies and the investigation report is likely to be tabled shortly.

“The delay in submission of limited review financials for the last two quarters is mainly due to non-completion of investigation report. The limited review financials will be submitted after the completion of investigation report which will help invoke the suspension of trading in the stock exchange,” the filing said.

Coffee Day Global Ltd (CDGL) – a subsidiary of CDEL – has mandated global auditing firm Deloitte only for the limited purpose of Vendor Due Diligence (VDD) with respect to proposed stake sale and not for conducting any forensic audit of the vendors or any transactions of CDEL with any other entity, the filing said.

The promoter family has also decided that it will sell only a minority stake in the company to private equity investors, which have led to this audit before the sale, one of the sources said. A CCD spokesperson confirmed Deloitte’s appointment.

Market regulator Securities and Exchange Board of India (Sebi) suspended trading in shares of Coffee Day Enterprises (CDEL) on Monday.

Sources in the know said breach of listing obligations by not submitting audited financial statements in time could be the reason behind suspension of trading.

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