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A black letter day for Indian startups and entrepreneurs

An extract from a new book dwells on the sudden disappearance of sixty-year-old V. G. Siddhartha, the founder of Café Coffee Day

A file photo of  V. G. Siddhartha
A file photo of V. G. Siddhartha

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On the morning of Monday 28 July 2019, sixty-year-old Veerappa Gangaiah Siddhartha Hegde, popularly known as V. G. Siddhartha, or VGS, left his home in India’s garden city and IT capital, Bengaluru, after informing his family that he was heading out to office and then to his family home at Sakleshpur in Hassan district, 221 kilometres from Bangalore.

VGS was, among other things, the founder of Café Coffee Day, India’s largest chain of home-grown coffee cafés, and a famed investor in Indian technology companies, including Infosys, the second-largest listed company by market capitalization, and Mindtree.

Born into a family that had owned coffee plantations for 140 years and was in the coffee business, in 1989, VGS married Malavika Hegde, the daughter of former Karnataka chief minister, S.M. Krishna. The couple have two sons—Amartya and Ishaan.

On this fateful day, VGS left home for office earlier than usual, at 8.00 a.m. rather than his usual 9.30 a.m.But Malavika and Krishna were not surprised. They knew VGS loved to visit his hometown and father’s coffee estate. VGS left his office for Sakleshpur at 11.00 a.m. Along the way, VGS instructed his chauffeur, Basavaraj Patil, to steer the black Toyota Innova to Mangaluru instead, about 130 kilometres further down from Sakleshpur. The drive from Karnataka’s capital city to Sakleshpur along the scenic NH75 highway would have usually taken around four to five hours. This detour entailed an additional three to four hours’ drive.

One would have thought that VGS, at worst, would have been in a cautiously optimistic frame of mind. He had sold his stake in Mindtree for a consideration of 3269 crore ($435 million) in March 2019, thereby reaping a handsome profit of 2858 crore ($380 million).

In filings made to the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), VGS’s flagship company, Coffee Day Enterprises Limited (CDEL) had stated that proceeds from the Mindtree stake sale would be used to ‘pare down the Coffee Day Group’s debt’. CDEL’s consolidated debt as of 31 March 2019 was a sizeable 7269 crore ($1.0 billion),3 more than double the proceeds received from the sale of the Mindtree stake.

By 7.00 p.m., the Toyota Innova had reached the Ullal bridge that spans the Netravati river on the outskirts of Mangaluru. VGS instructed Patil to drop him off at the bridge and return an hour later. When Patil returned, there was no sign of VGS.

He called his employer several times, but VGS’s mobile was switched off. Panicking, Patil called VGS’s family in Bengaluru, who immediately instructed him to lodge a complaint at the local police station.

In his statement recorded with the police, Patil stated that VGS had called around 15–20 people while being driven to Mangaluru and apologized to them. The chauffeur acknowledged that VGS had sounded upset. The police initiated a search operation amidst intense media scrutiny.

On 29 July 2019, a typed letter, purportedly a suicide note, found its way on social media.

Suicide Note Goes Viral

This note that bore VGS’s signature indicates the despondent state of mind of a man under pressure.

Some of the statements in the note were, ‘I have failed to create the right profitable business model despite my best efforts; I gave up as I could not take any more pressure from one of the private equity partners forcing me to buy back shares; Tremendous pressure from other lenders led to me succumbing to the situation; There was a lot of harassment from the previous DG income tax in the form of attaching our shares on two separate occasions to block our Mindtree deal and then taking position of our Coffee Day shares, although the revised returns have been filed by us; My team, auditors and senior management are totally unaware of my transactions. The law should hold me and only me accountable as I have withheld this information from everybody including my family.’

Expectedly, the letter went viral on social media.

Excerpted from Unfinished Business by Nandini Vijayaraghavan with permission from Penguin Random House India.

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