The Mangaluru Police investigating the death of VG Siddhartha — Coffee Day founder and son-in-law of former Chief Minister SM Krishna, say that he was riddled with debt amounting to several hundreds of crores. Speaking to TNM, police officials who are looking into his financials say that the several holding companies of Coffee Day, in which he was a shareholder, had incurred a debt of Rs 3,500 crore in total.
Sivan Securities, Devadarshini Info Technologies, Coffee Day Consolidations and Gonibedu Coffee Estates were Siddhartha's personal holding companies and he had pledged his shares in these companies for the loan, police sources say.
"Coffee Day itself was in debt and in addition, there was the debt to these private holding companies. We suspect that this huge amount of debt had put him under a lot of stress. He had leveraged shares in so many companies he owned that it had become difficult to repay them," the police said.
Police say that investigations led them to believe that Siddhartha wanted to clear the loan he had taken from the private equity firm Standard Chartered Private Equity (Mauritius), Credit Opportunities Fund and Asia Credit Opportunities (Mauritius) and KKR (a US private equity giant). Standard Chartered and KKR had 5.6% and 6% stake in Coffee Day Enterprises.
"Devadarshini Info had also taken a loan from these two PE firms. He wanted to pay back the loans to Standard Chartered and KKR as he had pledged that the lenders could take over his shares in Coffee Day if he failed to repay the loans," the police added.
ET reported that Devadarshini secured Rs 471 crore through optionally convertible debentures from Standard Chartered Private Equity (Mauritius) in September 2014. Gonibedu Coffee too had a debt facility of Rs 450 crore.
As on March 31, 2019, the total debt of Coffee Day Enterprises stood at Rs 6,547 crore, which is nearly 2.5 times the net worth of Rs 2,529 crore. Mangaluru police confirmed that they have already questioned a few of these entities.
Siddhartha had begun efforts to reduce debt overall. Despite being one of the first and largest investors in Mindtree, he sold his 20.32% stake in the IT services company for around Rs 3,200 crore. After tax, the remaining of this money went towards bringing down debt in Coffee Day.
Apart from this, Siddhartha was also in talks with Coca Cola to sell a major portion of equity to the beverage giant, while eyeing a valuation of around Rs 10,000 crore.
It was also reported that Blackstone was in talks to buy a majority stake in Siddhartha's real estate venture Tanglin Developments for around Rs 2,800 crore. Tanglin has a tech park -- 'Global Village', which is a 4-million-sq ft tenanted office space located on a 120-acre campus in Bengaluru, and counts Accenture and Mphasis among its tenants, besides having the headquarters of Mindtree.
VG Siddhartha went missing on Monday night near the Netravathi river bridge. He was travelling from Bengaluru to Mangaluru when he allegedly told his driver to stop the car on the bridge. Siddhartha is believed to have told his driver to stay inside the car and that he was going to take a walk. Over an hour after he left, his phone was switched off, which began worrying his driver. The driver, Basavaraj Patil then informed Siddhartha's family and the police.
A fisherman named Symond D'Souza had also informed the police that he had seen a man fall off the bridge on Monday night, which led them to suspect that it could have been Siddhartha. His body was found in the river by fishermen on Wednesday morning after a 36-hour search operation. His last rites were performed in Chikkamagaluru later on Wednesday.