Indians are synonymous with the word “Tea” but one man who was an investment banker upto 1996 decided to change the face of the people and the country.
He is none other than VG Siddhartha, the Coffee man of India. He created Cafe Coffee Day, popularly known as the Indian cousin of StarBucks.
Born into a coffee plantation family in Chikmagalur district. His family has been into coffee business for more than 130+ years and he was always passionate about coffee making.
He completed his master’s in 1983-84 from Mangalore University and at the age of 24, he started working in JM Financial Limited as a management trainee and intern for 2 years.
The Rise of Coffee Baron
He quit his job in 1985 as his father gave him money to start the business of his choice. He decided to be a full-time proprietary investor. He had 10,000 acres of coffee farms by then.
In 1990, India was undergoing rapid economic changes due to the new liberalisation policies adopted by the then finance minister and former prime minister Dr Manmohan Singh. Due to new liberal policies, Siddhartha’s investment got doubled in no time.
He decided to sell coffee to the foreign markets and thus in 1993, Amalgamated Bean Coffee Trading Company Ltd was born.
His 10,000 acres of coffee farms would produce 3000 tonnes of coffee and they would export 20,000 tonnes of coffee every year and in 2 years Siddhartha understood the need to set up a multi-chain Indian coffee franchise set up to cater to the Indian masses. Thus the Cafe Coffee Day was born.
So in 1996, Siddhartha launched the first Cafe Coffee Day store in Bangalore’s most famous Brigade Road. Those days the internet was expensive and the coffee was cheap. So he made an unrelenting offer of 1 cup of coffee with 1 hour of high-speed internet at 100rs. This business model had become an Instant hit and it is very popular among the 80’s kids.
Today, Siddhartha has 12,000 acres of coffee farms, 1650+ cafes, close to 50,000 coffee vending machines, 500+ kiosk and 400+ coffee seeds selling outlet.
As per reports, the annual turnover of Cafe Coffee Day enterprise is estimated to be across 4200 crores of India rupees and VG Siddhartha has a net worth of 8200 crores.
He was awarded an entrepreneur of the year in 2002-03 by the economics times.
He is the son in law of former Karnataka Chief Minister SM Krishna, who was then in Congress party and 2 years back switched to BJP.
Besides CCD, Siddhartha is a board of directors in Mindtree, a software company, GTV, Liquid Krystal, Way2Wealth and Ittiam. L&T has recently purchased 20% shares on CCD.
The fall of the Coffee King
For the last few years, his business was not growing at an expected level of profits.
In September 2017 Income tax department raided his offices in Chennai, Banglore, Mumbai and Chikmagalur by Income Tax office of Karnataka and Goa.
The moment he was raided by tax authority his share prices in the share markets collapsed and Siddhartha debts started rising.
One of the most senior officials in the IT department attached his shares in Mindtree. Because of which he was unable to sell his share from Mindtree and repay his debts. IT department had said that they had raided his office for tax evasion.
With all these unexpected events unfolding for the last 2 years, Siddhartha finally wrote a letter to his CCD family and its board of directors.
The matter dated 27th July, says that he has failed as a businessman and he also says that 6 months ago he had borrowed huge sums of money to repay the debts. He also says that he was facing harassment from DG of Income-tax even though the revised return had been filed.
He calls it unfair and says that it lead to a liquidity crunch. He says that he owns he takes responsibility for all the financial troubles.
He says that neither his auditors nor his senior management team and neither his family should be held responsible for financial irregularities. He also asks the board of directors to be strong and run all his business with new management.
In the letter, he writes that he has enclosed a list of assets and value of each asset, which should help them repay all their liabilities and clear every firm/Bank of their money.
— Karthik R (@karthik0415) July 30, 2019
Lost and Found dead
Siddhartha went missing on Monday, 29th July and was last seen near Ullal bridge from Netravati River in Mangalore.
He was travelling on his car where he asked his driver to stop by the roadside and told him that he was going in for a walk and never returned.
A police complaint was filed the same evening. After 36 hours of search and rescue operation by the navy and coast guard.
Siddhartha was found dead by a fisherman at hoga bazar and he altered the Mangalore police commissioner.
He is survived by his wife Malvika Hedge and his two sons.
Siddhartha is gone but the aroma of his coffee will live on for ages.
— T Raghavan (@NewsRaghav) July 30, 2019