Coffee Day to expand board, Siddhartha's wife to be non-executive chairman

After the resignation of Sulakshana Raghavan last week, the board is planning to induct two independent directors soon

Coffee Day Enterprises is planning to expand its board and appoint of a full-time chairman, besides induction of two independent directors, soon.

Sources privy to developments said Malavika Hegde, wife of founder of Coffee Day Group V G Siddhartha, is likely to take up the role of non-executive chairman.

A full-time chairman is expected to stabilise the operations of the company after the death of Siddhartha, whose body was recovered last month under mysterious circumstances.

“Continuance of an interim chairman doesn’t augur well for the company which needs a dedicated person to take care of every aspect. This stability is crucial for raising funds from the market to pare debt and get back investors’ confidence,” said a person in the company familiar with the development.

He added, “So, the board expansion is urgently required. This subject will be taken up by the board once Malavika (Hegde) starts attending the meetings.”

Hegde is currently on the company’s board as a non-executive director. “She has been participating in the board proceedings and knows the company well. So, it will be a good choice,” said a corporate governance official.

S V Ranganath, former chief secretary of the Karnataka government and an independent director on Coffee Day Group board, is acting as the interim chairman.

“This is a temporary arrangement. Since no other director outside of the promoter group is based out of Bengaluru, he had to take charge,” another person aware of the developments said.

Sources in the company also said when an independent director becomes the chairman for a long period, conflict of interest issues could be raised.

After the resignation of Sulakshana Raghavan last week, the board is also planning to induct two independent directors soon.

Raghavan, the managing director of Landor Associates, was an independent director on Coffee Day Group board, and quit on August 2, citing personal reasons.

After her exit, there are only four directors on the board — Albert Hieronimus (independent); Sanjay Nayar, the country head of KKR (nominee director); S V Ranganath; and Hegde.

Sources said the search for independent directors has started.

At the board meeting on Thursday, the company appointed EY to scrutinise the books of accounts of the firm along with its subsidiaries in the light of the suicide note purportedly written by Siddhartha.

The company is also planning to get a person of eminence or a reputed firm as its strategic corporate advisor for determining future strategy.