A day and a half after Cafe Coffee Day founder V G Siddhartha was feared to have jumped off the Nethravathi Bridge in Mangaluru, his body was found a kilometer from the spot by fishermen and policemen around 6.30 AM on Wednesday, 31st of July, 2019. Prima-facie, it appears to be a case of suicide. Before this, a letter which he might have apparently written to his employees and board of directors has surfaced online. Siddhartha wrote he was under pressure from a private equity partner and other lenders. “I am sorry to let down all the people that put their trust in me. I fought for a long time but today I gave up,” he further wrote. The letter ends with “My intension was never to cheat or mislead anybody, I have failed as an entrepreneur. This is my sincere submission, I hope someday you will understand, forgive and pardon me. I have enclosed a list of our assets and tentative value of each asset. As seen below, our assets outweigh our liabilities and can help repay everybody.”

The coffee retailing business under the brand CCD is the market leader in India. Siddhartha’s coffee retail business was expecting to close the year ending March 2020 with sales of about Rs 2,250 crore. However, in an explosive revelation, data swept from stock exchanges and Ministry Of Corporate Affairs’ filings has unraveled that deceased Cafe Coffee Day promoter VG Siddhartha may have been under an enormous debt pile of up to Rs 11,000 crore. While listed firm Coffee Day Enterprises reported a debt of Rs 6,547 crore on 31 March, 2019, fresh data from Siddhartha and promoter group’s four private holding companies reveals they had outstanding pledges worth Rs 3,522 crore as of fiscal 2018-19. His last communication though suggests that his assets has a valuation much higher in number as compared to his liabilities. The Coffee Day business received revenues of Rs 2,200 crore in March 2019 and the brand itself is valued at Rs 8,000 crore. Add to it, a factory in Chikkamagaluru, family- owned plantations, and hospitality business were some of his assets that equate to nearly Rs 20,000 crore. The fact that a person worth close to Rs 20000 crore chose death over going bankrupt is quite baffling in itself and has the driven the business community of the country to its wit’s end.

It is argued that the sharp increase in the short-term loans in the recent past and liquidity crunch caused by the unavailability of further loans and the inability to sell his assets had forced his hands. A former deputy managing director at the State Bank of India said there were several business owners who went for bankruptcy and fought it for years. In Siddhartha’s case, according to him, his assets could have covered his debts and he wouldn’t have to stare at bankruptcy at all. But the liquidity crunch could put pressure on a businessman, he added.

Siddhartha was self-deprecating and humble, whose word was valued. This is one of the reasons why there were several lenders and financial participants backing him. But then, when you are valued and you default, your self-esteem goes for a toss and for a person to survive this agony, one has to have a thick skin. Yet again, if you have a thick skin, you will not have such a persona like the one which Siddhartha held. There are a whole lot of people who have much thicker skin, they left the country or are contesting these things (defaulting) for over 700 days. Siddhartha’s case was much more than just a comparison of assets and liabilities, said a former director of a leading multinational corporation, who hinted at an immediate trigger.

“The question on my mind is whether he was forced to pay up for something immediately, which included some sort of threat or humiliation, something that had forced his hands. Because a person like him will not take this lightly. He is a rich man, very well-connected. So, there was something that happened that broke him,” he said. According to him, insolvency was not an option for Siddhartha. “You must understand what it means to him. It is important to understand his social milieu, his standing in the society, status and all that,” he said.

Business men in India are a harassed lot. Harassed by tax departments, harassed by investigation agencies, harassed by various government bodies, harassed by courts, harassed by politicians and the list goes on. Not all business men are Mukesh Ambani. For every successful Mukesh there will be thousands of Anil. That doesn’t mean one should be charged with criminal intent. Business in India is highly prone to risk due to unpredictable actions of government, wrong notions of court, market conditions, wrong decisions and business failure. Defaulting is not always a crime. If a bank loan is taken and business fails, the promoter is treated as a criminal and all agencies swoon upon him. Take the case of Jet airway’s Naresh Goyal. A person who struggled for 25 years and employed more than 30,000 people has finally lost. Now he is being treated as a criminal and not allowed to travel abroad. Yes! there are fugitives like diamantaire Nirav Modi but there are also persons like VG Siddhartha who held his honour and self-esteem above everything else.

The government and judiciary should not always have a biased opinion and businessmen should be given opportunities to excel and support should be extended when in dire straits. Else, India would remain a population of employees only and there will be foreign employers basking in the sun. India is an attractive hub for foreign investments. Several mobile phone, luxury and automobile brands, among others, have set up or are looking to establish their manufacturing bases in the country. The manufacturing sector of India has the potential to reach US$ 1 trillion by 2025 and India is expected to rank amongst the top three growth economies and manufacturing destination of the world by the year 2020. The implementation of the Goods and Services Tax (GST) will make India a common market with a GDP of US$ 2.5 trillion along with a population of 1.32 billion people, which will be a big draw for investors. But is it only the growth rate that we should be focused about, or should ‘Make in India’ policy also boast of people who are son of the soil and in the case of any eventuality would not choose death over going bankrupt.

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