The Mystery Behind The Death Of India's Coffee Magnate

Unravelling the mystery behind the death of India's coffee magnate.

- Rukmini Rao

In death, V.G. Siddhartha unfortunately attracted the kind of publicity he had sought to avoid throughout his life. The intensely private businessman, who had built one of the best known consumer retail brands in India, Café Coffee Day, had avoided drawing attention to himself. But even before his body with a blood stained face and clenched fists was fished out from the backwaters of Netravati river by local fishermen at the break of dawn on July 31, his disappearance 36 hours ago, and the typed and signed letter he purportedly left behind, put his life and business dealings under scrutiny and triggered intense speculation.

The letter, which he had reportedly written two days before disappearing, was addressed to the board members and the CCD family. It said, “My intention was never to cheat or mislead anybody, and I have failed as an entrepreneur.” He blamed himself for failing to create a profitable business model and also blamed severe extraneous pressures from PE firms, lenders as well as the tax department for taking an extreme step.

From his days as a young and ambitious stock broker in Mumbai in the 1980s to building a conglomerate over the next two decades, Siddhartha was always a big picture man. His death has not only raised some uncomfortable questions for corporate India but also about his businesses. On the surface, while his listed business – Coffee Day Enterprises (CDEL) – was facing severe cash flow problems and was highly leveraged, there seemed little reason for Siddhartha to have taken such an extreme step. At a consolidated level, his business was making profits, and the recent sale of shares in the mid-sized IT firm Mindtree to L&T had given the company enough cash to reduce its debt to a more manageable level. The coffee retailing operations seemed on a solid footing, but like many businesses, it was facing a liquidity crunch.