Coffee Day Shares Tumble 20% for 2nd Day After Police Recover Founder Siddhartha's Body
Shares of Coffee Day Enterprises, which operates India’s largest cafe chain Café Coffee Day (CCD), slumped 20% to hit 52-week low of Rs 123.25 at 9:15am on Wednesday.
Cafe Coffee Day VG Siddhartha, who was found dead on the banks of the Netravati river in Mangaluru. (Image: Twitter)
Coffee Day Enterprises Ltd shares hit the lower circuit again for a second day on Wednesday after its founder VG Siddhartha’s body was found near Karnataka’s Netravathi river in the morning, nearly 36 hours after he went missing on Monday evening.
Shares of Coffee Day Enterprises, which operates India’s largest cafe chain Café Coffee Day (CCD), slumped 20% to hit 52-week low of Rs 123.25 at 9:15am on Wednesday. The stock had fallen 20% in the previous session as well.
Siddhartha went missing on his way to Mangalore from Bengaluru on Monday, prompting authorities to launch a massive search operation.
Coffee Day Enterprises on Tuesday had released a statement saying it was formulating appropriate steps to ensure business operations remained unaffected.
“The board is confident that the professional management of the company and each of the entities in the Coffee Day Group and their respective leadership team will ensure continuity of all business operations consistent with past behaviour,” it stated.
Siddhartha’s sudden disappearance shocked the country, especially after a letter reportedly written by him to the CCD board emerged on Tuesday in which he said that he failed to create the ‘right profitable business’ model despite taking best efforts.
“After 37 years, with strong commitment to hard work, having directly created 30,000 jobs in our companies and their subsidiaries, as well as another 20,000 jobs in technology company where I have been a large shareholder since its founding, I have failed to create the right profitable business model despite my best efforts,” he had written in the letter.
Siddhartha further alleged that tremendous pressure led to “me succumbing to the situation”.
He blamed “pressure from one of the private equity partners”, “pressure from other lenders”, “harassment from the previous DG income tax” and “serious liquidity crunch” for his “failure”.
“I fought for a long time but today I gave 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,” he wrote.
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