Soft-spoken, polite, and uninterested in the limelight is how most who have known V G Siddhartha, chairman and managing director of India’s first home-grown national coffee chain, Café Coffee Day (CCD), describe the entrepreneur, who is now missing since Monday evening as speculation mounts on his disappearance.
While his wife Malavika Hegde is daughter to S M Krishna, the former chief minister of Karnataka, it’s an association that Siddhartha detested to draw up on or refer to, even instructing his public relations team to ensure such references were strictly to be avoided while promoting his brand and companies.
The 60-year-old Siddhartha is untraceable. According to his driver, he got off his car near the Netravati River near Mangaluru on Monday evening and never returned. There’s been a letter in circulation which was handed to the local police by his relatives, where he essentially talks about being unable to handle growing debt and obligations to his banks and private equity investors, and how he is ‘giving up’. According to sources, at least 250 police officers are searching for the man and that beyond assuming the worst, it’s impossible to get a sense of what may have further transpired.
Part of Karnataka’s Gowda community, which consists of landlords and village heads, ‘VG’ as he is referred to got an economics degree from Mangalore University before he took a small loan from his father to experiment in the stock market, and then landed in Mumbai to work at JM Financial, learn all about the stock exchange and how deals were done. That gave him the platform to start his ventures with. In due course, he would go on to set up a cluster of businesses, of which the best known would be CCD.
VG is considered to be the hardest working entrepreneur most people said they’ve met. Frugal to a fault, VG is known to take the earliest flight in the morning and the last flight out at night, so that there’s no waste of money on a hotel when on business travel. He would even insist on doing business meetings at CCD locations, say those who knew him. “I’m proud of what I have built,” he would say.
He grew the coffee chain, which was set up in 1996, to around 1,600 outlets in India and a few overseas locations, with consolidated operating revenues of Rs 4,264 crore in 2018-19, and while he did run more than one venture, it was CCD — coffee accounted for nearly half of the revenue — that he wanted to primarily build into a global chain, often talking about in public fora and expressing how high-street retail was the future.
Coffee Day Enterprises, the listed company, which operates CCD and has controlling stakes in Sical Logistics and financial services company Way2Wealth, reported a total debt of around Rs 6,550 crore as of March. Siddhartha’s stake in Coffee Day Enterprises was 53.93 per cent, of which 75.7 per cent was pledged as of June 2019.
Overall, Siddhartha’s business has been under pressure, but not to the point that he would need to take drastic steps, says one vendor who has worked closely with him and added that his payments were late on occasion but he always made good. Those who worked with him during his initial public offering for CCD add that VG has been that rare entrepreneur with a conscience and deeply affected when unable to pay back borrowed money. “Some business people can default and still sleep well at night — not VG,” said one associate. A senior Mumbai-based chartered accountant, who has worked closely with him, agrees: “VG can be certainly considered strong-willed, but not thick-skinned.”
People who have known him are surprised at his disappearance. “There have not been any signs of his financial position being critical,” a close business associate said. They go on to add that VG has been an aggressive deal-maker, possessed high levels of self-confidence. A financier says there could be higher debt at the holding companies’ level, which is not known in the public domain so far.
A family man with two sons, who made it a point to attend all weddings and occasions in the community, Siddhartha is known by everyone as the quintessential ‘nice guy’ CEO — never yelling, raising his voice or screaming at his employees.
According to an Outlook Business feature that Siddhartha participated in three years ago, there are clear signs of his core values. “Name is more important than money,” he said in the story, indicating that reputation above all is what he prized.
He goes on to highlight his lifetime highs and lows: he was miserable when his stock listed 18 per cent below issue price, and was most enthused about employing 43,000 people and aspired to be amongst the top three coffee brands worldwide.
“I cannot think of anyone who has been VG’s enemy,” says a distant cousin, who declined to be named. “It appears to be a case of him being unable to digest his failure to tackle a system working against him.”