Demystifying the Unfortunate Demise of CCD’s Founder

Demystifying the Unfortunate Demise of CCD’s Founder


Time to Read: 2 minutes

VG Siddhartha, the founder of Café Coffee Day, the largest coffee chain in the country, was the man who was looked upon by a number of aspiring entrepreneurs as a source of inspiration.

The end of July has not been very pleasing, especially for the world of entrepreneurs as we heard the news of VG Siddhartha’s suicide. As he went missing on 29th July, there was a lot of buzz and speculation about him. On 30th July, his body was found dead on the banks of the Netravati river near Mangaluru which at first brought itself disbelief and a sense of creeping dread followed by shock and distress.

VG Siddhartha, the founder of Café Coffee Day, the largest coffee chain in the country, was the man who was looked upon by a number of aspiring entrepreneurs as a source of inspiration. His pervasive and omnipresent coffee chain was loved by almost every Indian as it gave us long-anticipated reunions, gossip sessions, warm breaks on highways or what can be called in a nutshell, “a-lot-can-happen-over-coffee” moments. This was perhaps the reason why his sudden tragic demise was received with utter shock and sadness by many.

However, there is more to the story. Ever since the death of Siddhartha, private equity firms have come under extreme scrutiny. Before going missing, Siddhartha left a note which hinted at the “tremendous pressure” he was undergoing from lenders and “harassment” from Income Tax officials. “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 the position of our Coffee Day shares, although the revised returns have been filed by us. This was very unfair and has led to a serious liquidity crunch”, Siddhartha said in the letter.

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Who is to be Blamed?

As soon as the letter went viral and the news of Siddhartha’s demise broke, practices of private equity firms came under severe criticism. While some said that the private equity firms are charging high interest rates on the debts they offer to entrepreneurs, some found offense and flaw in the buyback clause that’s typically part of a private equity deal. However, can we actually blame them? Or the government is at the fault, if seen the larger picture? Is the ease of doing business in India just an empty slogan? Are the tax authorities going too far in “the interest of revenue”? Is there inadequate focus on the stress and mental health issues that an entrepreneur undergoes?

We cannot conclude with certain and definitive answers. However, these are some of the questions which are needed to be acknowledged by the respective authorities.

This should be a red flag for the government with respect to the lack of capital that is available to companies at the current juncture. Private equity firms must acknowledge failures at a much earlier stage instead of waiting it to become grave. And lastly, entrepreneurs must factor in challenges in their business plans and not make high promises that may put undue stress on them in the future. It is okay to under-promise and over deliver.


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Demystifying the Unfortunate Demise of CCD’s Founder

by Editor's Desk Time to Read: 2 min
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