The Cafe Coffee Day Board on Wednesday said it will investigate any past financial transactions that were carried out without the senior management’s knowledge. The statement came the day VG Siddhartha Hegde, the chairperson and managing director of Coffee Day Enterprises, was found dead.
Siddhartha Hegde had gone missing on Monday evening. His body was found on the banks of the Netravati river, near Hoige Bazaar in Mangaluru, on Wednesday morning. Hegde was the son-in-law of Bharatiya Janata Party leader SM Krishna.
In a stock filing in the Bombay Stock Exchange on Wednesday, the Cafe Coffee Day Board said it had taken cognizance of a letter, purportedly written by Hegde, relating to the financial transactions “outside the knowledge of the senior management, auditors and the Board”. In the letter, Hegde had alleged that he was being harassed by the tax department.
“While the authenticity of the letter is unverified and it is unclear whether these statements pertain to the Company or the personal holdings of Mr VG Siddhartha, the Board took serious note of the same and resolved to thoroughly investigate this matter,” the stock filing said. “The Board remains deeply committed to safeguarding the interests of all stakeholders, including investors, lenders, employees and customers.”
The Board appointed SV Ranganath its interim chairman and Nitin Bagmane the interim chief operating officer of the company “on terms to be detailed and approved”. It also constituted an executive committee comprising Ranganath, the non-executive independent director, Bagmane and chief financial officer R Ram Mohan “to exercise the powers previously vested with the Chief Executive Officer of the Company and the Administrative Committee constituted by the Board in 2015”.
The executive committee will explore opportunities to “deleverage the Coffee Day Group”, the Board said, adding that it will, in time, prepare a “detailed charter of authorities vested” in this panel.
The company’s shares, which had plunged 20% on Tuesday, fell another 20% on Wednesday. The stock closed at Rs 123.25 per share on Wednesday.