CCD names S V Ranganath as interim chairman; Nitin Bagmane as interim COO

Coffee Day Enterprises on Wednesday named independent director S V Ranganath as the interim chairman of the company to replace its founder V G Siddhartha, who has been confirmed dead days after he went missing. The company board, wherein Siddhartha's wife Malavika Hegde is also a director, met on Wednesday to put in place a working structure of the company.

The board appointed "S V Ranganath as the interim chairman of the board" and "Nitin Bagmane as an interim chief operating officer (COO) of the company," Coffee Day Enterprises, which runs India's biggest coffee chain CCD, said in a regulatory filing.

It also constituted an executive committee comprising Ranganath, COO Nitin Bagmane and CFO R Ram Mohan "to exercise the powers previously vested with the Chief Executive Officer of the company and the Administrative Committee constituted by the Board in 2015," it said.

"The board will, in due course, prepare a detailed charter of authorities vested in the Executive Committee and approve the same," the filing said.

The Executive Committee will explore opportunities to deleverage the Coffee Day Group, it said.

The body of Siddhartha, who had been missing since Monday evening, was found on Wednesday in the Netravati river in Dakshina Kannada district of Karnataka after 36 hours of intense search, officials said.

Siddhartha purportedly wrote a letter indicating he was anxious about pressure from banks, investors and the tax authorities before he went missing.

"The board took cognizance of statements in the purported letter from V G Siddhartha relating to financial transactions outside the knowledge of the senior management, auditors and the board.

"While the authenticity of the letter is unverified and it is unclear whether these statements pertain to the company or the personal holdings of V G Siddhartha, the board took serious note of the same and resolved to thoroughly investigate this matter," the filing said.

The board expressed its condolences to Siddhartha's family and resolved to lend its support and expressed full confidence in the company's management team.

"The board also took note of a message from Malavika Hegde expressing support and trust in the company's professional team and the common effort to look after the interest of the employees and all other stakeholders," it said. "The board remains deeply committed to safeguarding the interests of all stakeholders, including investors, lenders, employees and customers." The company said the Audit Committee and Executive Committee will engage in discussions with the statutory auditors of the company and such other advisors as may be necessary with a view to recommend appropriate next steps to the board at its forthcoming meeting on August 8.

The board has also appointed Cyril Amarchand Mangaldas as its legal counsel to advise on these matters.

CCD crisis: I-T officer draws flak for tax terrorism day before retirement

The man under the spotlight of tax terrorism debate — B R Balakrishnan, chief commissioner of income tax (I-T), Bengaluru — was in the midst of farewell calls and goodbyes when a letter written by missing Café Coffee Day chain founder V G Siddhartha went viral on Tuesday. The letter, addressed to the board members and staff, had alleged harassment by the “previous DG of I-T’’, without naming him. The same officer, from the 1983 batch Indian Revenue Service, will retire on Wednesday (July 31) as Bengaluru’s I-T chief commissioner.

Balakrishnan refused to react to the India Inc criticism of growing incidents of tax terrorism following Siddhartha’s letter. Appearing unfazed, he told Business Standard, ‘’I only believe in doing my job well.’’

Recently, Balakrishnan was caught in a political controversy over a series of raids carried out by his team. Then coalition government of Karnataka led by H D Kumaraswamy had complained to the Election Commission against this I-T officer for “picketing outside its office’’. Kumaraswamy and other ministers had alleged “selective raids” on supporters of JD(S) and Congress ahead of elections. 

Prior to joining as DG (Investigation), Balakrishnan had worked in the Investigation Wing of the IT department in Chennai and Mumbai. In 2017, a probe led by Balakrishnan had unearthed the ‘gutkha scam’ where bribes were paid to Tamil Nadu ministers.

His colleagues pointed out that Balakrishnan was an efficient and upright officer, besides being a technology freak. A former Central Board of Direct Taxes (CBDT) chairperson described Balakrishnan as a good investigator who went by the law. “It is hard to believe that Balakrishnan would have resorted to harassment,’’ he said.

However, another IRS officer argued that perhaps Balakrishnan did not make an attempt to understand the imperative under which CCD and other related entities were operating. ‘’Did he not know he was going to kill the company? Should he not have taken a call or discussed with the minister?’’ were among the questions being asked.

In an interaction with the industry in 2018, Balakrishnan had said, “We don’t prosecute people with any sadistic pleasure…. If there are cases of deliberate attempts to evade tax, or those having illicit income coming from drugs and corruption, I don’t think it is fair to not prosecute them.”

Cafe Coffee Day founder VG Siddhartha missing in Mangaluru: Report

Cafe Coffee Day (CCD) founder and former Karnataka Chief Minister, SM Krishna's son-in-law, V G Siddhartha, is suspected to have jumped off a bridge in Mangaluru on Monday night, the Times of India reported on Tuesday.

According to the report, the news emerged after the Mangaluru City Police started a search for a person who had jumped off the kilometre-long Ullal bridge on Monday night. 

The report said that one of the police officers confirmed that a person was suspected to have jumped off the Ullal bridge, which is built across the River Nethravathi, at 9pm. A search operation is now underway while his mobile phone is reported to be switched off.

According to the report, based on the statement of a person, reportedly a car driver, the person in question is suspected to be Siddhartha.

Siddhartha had been in the news earlier this year when news agency PTI had reported that IT company Mindtree found certain irregularities in disclosures made by him.

Siddhartha had sold his stake in Mindtree to L&T, and it had taken action against him according to the law.

"On the pledge disclosure issue, there was a disclosure that he made at certain point of time of all the pledge. At that point of time, there were some irregularities in his disclosures. Our board and audit committee evaluated it and handled it as per the rule that were prevailing at that point of time," Mindtree CEO Rostow Ravanan had said back then.

In this regard, the report said, while citing sources, a complaint against Siddhartha alleging insider trading during his stint at Mindtree was also filed with the Securities and Exchange Board of India (Sebi) by an anonymous person.

The report added that the complaint filed against Siddhartha had alleged that he and his firm Coffee Day group had sold shares that were pledged before various financial institutions.

Further, the sources told the news agency that the complaint argued that if these shares were pledged, a disclosure should have been made about these pledges under the Sebi Insider Trading Regulations and Sebi Takeover Regulations.