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As the Karnataka police recovered the body of Cafe Coffee Day owner VG Siddhartha, a letter written by him now sheds light on the intense financial distress the coffee magnate was under.
Siddhartha blames private equity investors and tax officials for his financial condition.
The Income Tax Department, meanwhile, stated that it has acted as per the povisions of the Income Tax Act. The tax department wrote that Siddhartha and CCD were investigated based on the ‘unearthing of a credible evidence of financial transactions done by the CCD in a concealed manner.’
The department stated that they recovered unaccounted cash worth Rs 1.2 crores from a person holding a citizenship of Singapore, who claimed that the money belonged to VG Siddhartha.
The coffee tycoon’s income tax woes began in early 2017 when he was accused of tax evasion.
In February 2017, NGO Samaj Parivartan Samudaya, which is known for fighting illegal mining cases in Karnataka, requested a Special Investigation Team (SIT) on black money to launch a probe into Siddhartha’s accumulation of wealth.
After tax-evasion claims, Income Tax officials conducted raids at VG Siddhartha’s residence and 20 other locations in Bengaluru, Chennai, Mumbai and Chikmalagur. Other locations raided included, Cafe Coffee Day headquarters in Bengaluru’s UB City, and the corporate office of the Amalgamated Bean Coffee (ABC) Trading Company, which runs the CCD's retail outlets across the country.
"Though we have found and seized a number of documents related to properties, business transactions and other dealings, they are subject to scrutiny for violations, if any," reported Firstpost, quoting an I-T official’s e-mail to IANS.
In January 2019, the Income Tax department dealt a heavy blow to Siddhartha by ‘provisionally attaching’ shares held by the entrepreneur and Coffee Day Enterprises Ltd in the IT firm- Mindtree.
The I-T department’s move came at a time when the coffee magnate was in talks with companies to sell his 21 percent stake in Mindtree.
As per the restrictions, a total of 7.49 million shares held by Siddhartha and Coffee Day Enterprises faced the prohibitory order for six months, starting 25 January 2019.
Following the I-T crackdown on his shares in Mindtree, Siddhartha planned to offer alternative security to the I-T Department in order to gain back control of his shares in the tech company, reported The Economic Times.
The Cafe Coffee Day owner finally managed to sell his 20.4 percent stake in Mindtree to L&T for approximately Rs 3,269 crore. He earned a profit of over Rs 2,850 crore in the transaction, reported Business Today.
The deal helped Siddhartha repay his debt of about Rs 2,900 crore, reported LiveMint.
Apart from the Income Tax department, Siddhartha has also blamed some of his investors for his financial woes in the letter.
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