Siddhartha, a victim of tax terrorism?
Business watchers and competitors alike saw Café Coffee Day (CCD) as a successful brand. The high visibility of the CCD chain of over 1,800 outlets helped the Rs 4,500 crore company punch much above its weight. V G Siddhartha, entrepreneur and dreamer, founded CCD in 1996. He built his business on his own 20,000 acres of coffee bean estates in Chikkamagaluru.
Though all businesses have their ups and downs, given his firm foundations, nobody had guessed things had reached such a nadir for the CCD promoter to take his own life. Siddhartha’s dramatic and sudden death is also a stark reminder that despite all the public relations talk, the business environment in the country is inhospitable and those who build a clean business and achieve scale wear a crown of thorns. Siddhartha’s suicide note, disputed by the Income Tax department but validated by the company, is a sad testimony of the current environment.
The note specifically names two agencies that hunted him. The first is a private equity (PE) firm which he said had forced him to buyback his shares by borrowing heavily. Siddhartha also called out the DG, Income Tax, for the ‘tax terrorism’ by first attaching his Mindtree shares to block their sale to L&T when he was trying to raise Rs 3,200 crore and then by attaching his CCD shares, leaving him with a severe liquidity crunch.
Though the IT department has disputed these claims, there is sympathy for the unfortunate CCD promoter. Biocon CMD Kiran Mazumdar Shaw lashed out at the government saying, the financial investigations had “moved the country from license raj to inspector raj, which is seriously bothering India Inc”. Others feel that Siddhartha was among the many successful entrepreneurs of the UPA era who have been singled out by the enforcement agencies.
In this case, even his father-in-law and former Karnataka CM S M Krishna joining the BJP did not help. Yes, government agencies must ensure there is no financial wrong doing, but the selective targeting of self-made entrepreneurs will undermine the entire business ecosystem.