Shares of Coffee Day Enterprises, the parent company of India's largest coffee chain Cafe Coffee Day (CCD), hit lower circuit limit of 20 per cent for the second consecutive day on Tuesday, after news reports said the body of the company's founder VG Siddhartha has been found from the Nethravathi river.
Siddhartha, the founder of India’s largest coffee chain, went missing on Monday night en route to Mangaluru, with a letter purportedly written by him showing he was under "tremendous pressure" from lenders and one of the private equity partners (PEs). The letter also alleged "a lot of harassment" from tax authorities.
A massive search operation involving teams of the National Disaster Response Force, Coast Guard, Home Guard, fire services and coastal police had continued throughout Tuesday. Search teams had scoured the waters under a bridge across the Nethravathi river near Mangaluru where the 60-year-old businessman was reportedly last seen.
"I am very sorry to let down all the people that put their trust in me. I fought for a long time but today I gave up as I could not take any more pressure from one of the private equity partners forcing me to buy back shares, a transcation I had partially completed six months ago by borrowing a large sum of money from a friend," Siddhartha wrote in the letter dated July 27.
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. He sold his stake in Mindtree to L&T, and it had taken action against him according to the law.
Siddhartha's financials stayed weak after he sold his Mindtree stake, said a report by Business Standard. READ MORE
At close, the stock stood at the lower circuit price of Rs 123.25 apiece on the BSE. In comparison, the S&P BSE Sensex gained 84 points or 0.22 per cent to close the session at 37,481 levels.
Sical Logistics, another group firm, too hit a lower cicrcuit limit to close at Rs 58 apiece on the BSE, down 20 per cent.
In 2011 Sical was acquired by Coffee Day group, with interests ranging from coffee retail business, stakeholdings in leading IT and embedded technology companies, to technology parks and SEZs, hospitality and financial services.