One of India’s most prominent businessmen, credited with bringing coffee shop culture to the country, has been found dead after he had warned of financial troubles.
VG Siddhartha, the founder of Cafe Coffee Day, had been missing since Monday. Police recovered his body from the Nethravathi River near Mangaluru on Wednesday after a search by divers and local fishermen.
Indian media outlets quoted from a letter, apparently sent by Siddhartha to shareholders, citing financial problems and alleged pressure by tax authorities.
Opposition politicians have called for an inquiry into Siddhartha’s death amid suggestions that he had been harassed.
Siddartha, from the Chikmagalur district of Karnataka state, established Cafe Coffee Day in 1996. Its air-conditioned shops and comfy seating offered a meeting place for students and businessmen alike, and it became the biggest coffee chain in the country – holding off Starbucks thanks to cheaper prices.
“At that time we never had a culture of going out and having a coffee in the morning. He created that culture,” said AK Prabhakar, the head of research at IDBI Capital Markets.
The chain has more than 1,700 stores, mainly in India but also in Malaysia, Egypt, the Czech Republic and Austria. Starbucks has just 150 stores in India.
Siddhartha was reportedly in talks with Coca-Cola about selling a large stake in Cafe Coffee Day. The business had come under pressure and in 2017 Siddhartha’s properties in several cities were raided by tax officials.
In a letter apparently written by Siddhartha, he admitted that he had made mistakes but said he had been put under pressure by lenders and tax authorities.
“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 have given up as I could not take any more pressure from one of the private equity partners forcing me to buy back shares,” the letter said.
Siddhartha said he had faced “a lot of harassment” from the tax authorities. “My intention was never to cheat or mislead anybody, I have failed as an entrepreneur,” he said.
Siddhartha, the son-in-law of SM Krishna, a former foreign minister and chief minister of Karnataka, was from a well-connected family that has been in the coffee business for more than a century.
On Wednesday, cricketer Ravichandran Ashwin was among many who paid tribute to Siddhartha. “My first memories of going out with friends and having a cup of coffee happened only with the inception of cafe coffee day,” he said on Twitter.
Vivek Surendran, a writer and journalist, tweeted: “For millions of Indians, Cafe Coffee Day was the first coffee shop experience and that, for many like me, was a straight jump from chai at tapri”, a roadside tea stall.
The cafe was a status symbol, he said, “a brainstorming venue for many, place to celebrate poetry and have meet ups.”
The chain not only transformed coffee-drinking culture, but also created tens of thousands of jobs, added Rishikesha T Krishnan, professor of strategy at the Indian Institute of Management, Bangalore. “He created jobs not just for people from an urban setting but people from rural backgrounds who wanted an opportunity to work in a modern retail format.”
