A letter purportedly written by V.G. Siddhartha, chairman and managing director of Cafe Coffee Day, that surfaced hours after he went missing near Mangaluru on Monday evening, said financial troubles and harassment from Income Tax authorities had led him to “succumbing to the situation”.
But the Income Tax Department is raising doubts over his signature in the letter. “The authenticity of the note is not known and the signature does not tally with Shri VGS’s signature as available in his annual reports,” the statement from the Department said.
The board of Coffee Day Enterprises Limited, which met on Tuesday in the aftermath of Monday’s developments, submitted “the letter purportedly signed by Mr. Siddhartha” to the National Stock Exchange of India Ltd and and BSE Ltd.
However, police sources maintained that the letter was handed over to them by Mr. Siddhartha’s immediate family members and that they were at this moment not suspecting its veracity.
“We were told that he had dictated the letter to an assistant a few weeks ago. He called the assistant on Monday evening and directed her to release the statement at 8.30 a.m. on Tuesday. Following reports of his going missing, the assistant handed over the letter to his family members who gave it to us,” a senior police official overseeing the investigation said on condition of anonymity.
Senior police officials expressed surprise at the IT department’s statement as it had not even examined the letter.
“Since there have been doubts raised, we will get it examined by the Forensic Science Laboratory,” a senior official said.
Financial woes
In the letter, Mr. Siddhartha alleged harassment from Income Tax authorities.
Saying that he created 30,000 jobs in his firms and 20,000 jobs in a technology firm in which he was an investor, in the last 37 years, Mr. Siddhartha in the letter said: “I have failed to create the right profitable business model despite my best efforts.”
Narrating a tale of financial woes he said: “I fought for a long time but today I give up as I could not take any more pressure from one of the private equity partners forcing me to buy back shares, a transaction I had partially completed six months ago by borrowing a large sum of money from a friend. Tremendous pressure from other lenders lead to me succumbing to the situation.” (sic)
“There was a lot of harassment from the previous DG Income Tax in the form of attaching our shares On two separate occassions to block our Mindtree deal and then taking position of our Coffee Day shares, although the revised returns have been filed by us. This was very unfair and led to a serious liquidity crunch.” (sic).
Apologising, he said he was sorry to let down all the people that put their trust in him. “My intention was never to cheat or mislead anybody, I have failed as an entrepreneur. This is my sincere submission, I hope someday you will understand, forgive and pardon me,” he said in the letter.
He also attached a list of assets and their tentative value with the letter. “...our assets outweigh our liabilities and can help repay everybody,” he concludes the letter.
Earlier in the letter he requests to continue running the business with a new management. “I am solely responsible for all mistakes. Every financial transaction is my responsibility. My team, auditors and senior management are totally unaware of all my transactions. The law should hold me and only me accountable, as I have withheld this information from everybody including my family,” he said.
PTI adds:
Tax department acted as per law: sources
Refuting the charges, the sources said the provisional attachment made by the department was undertaken to protect the "interests of revenue" and was based on credible evidence gathered in the search or raid action.
"The department has acted as per provisions of the Income Tax Act," one of the sources told PTI .
They said Mr. Siddhartha fetched ₹3,200 crore from the sale of Mindtree shares, but paid only ₹46 crore out of total ₹300 crore minimum alternate tax (MAT) payable on the deal.
They claimed that the signature of Mr. Siddhartha on the letter being circulated on the social media under his name "does not match" with the record available with the department.
