In 2017, CCD founder VG Siddhartha admitted to ₹658-cr ‘unaccounted’ assets: I-T

Siddhartha’s body was found on Wednesday morning from the backwaters of the Netravathi river two days after he went missing. In the letter, he indicated mounting pressure on him to service debts, particularly from a “private equity” partner, who was forcing him to “buy back shares”.

VG Siddhartha, former chairman of Cafe Coffee Day (CCD) group, in a sworn statement to the income-tax (I-T) department had “voluntarily” admitted “unaccounted” incomes of over Rs 658 crore on September 23, 2017, and had asked for leniency, according to a statement reviewed by HT.

CCD founder VG Siddhartha’s body was found on Wednesday morning from the backwaters of the Netravathi river two days after he went missing. (Mint File Photo)

“Accordingly, my admission of unaccounted income is Rs 658,74,76,720/- as detailed above. I confirm that I abide by my admission and cooperate in further proceedings. I request you to be lenient in invoking penal provisions of the Income Tax Act,” Siddhartha said in the signed statement.

Email queries sent to the I-T authorities, including the official who obtained the sworn statement from Siddhartha in Bengaluru, did not elicit any response. When contacted, the office of the Cafe Coffee Day group company secretary Sadananda Poojary asked for an email query as he was busy in a meeting. Poojary, however, did not respond to the email query.

According to the sworn statement, the unaccounted amount included over Rs 204 crore due to the difference between purchase and sale value of shares in various companies in the assessment year (AY) of 2012-13. Capital gains of about Rs 146 crore in AY 2017-18, unaccounted cash investment in a property (Rs 11.62 crore) in AY 2012-13, suppressed income of Rs 47.43 crore between AY 2011-12 and 2016-17 and notional benefit accrued on interest component of CCD.

The statement was recorded after a search proceedings conducted at Siddhartha’s office premises of Coffee Day Global Ltd on September 21, 2017. The 71-question-answer statement was concluded on September 23 that included several breaks in between. The recording of statement continued till 11:30 pm on September 22 “on request of the assessee to give him rest”, which was resumed next day at 2:00 pm “after the assessee took sufficient rest and appeared for deposing for statement,” the documents said.

In the signed statement, Siddhartha wrote that “whatever stated above is true and correct” to the best of my knowledge. “The above statement is given to me voluntarily in sound state of mind and without any coercion, threat or under influence. I am aware of the consequences if any wrong statement is given. I have read over the above statement, the statement has been recorded as I deposed,” he said at the end of the document sworn before the deputy director of income-tax (investigation) in Bengaluru.

Siddhartha’s body was found on Wednesday morning from the backwaters of the Netravathi river two days after he went missing. Siddhartha, who was the son-in-law of BJP politician SM Krishna, had written a letter to the company’s board members and employees on July 27, days before his disappearance. In the letter, he indicated mounting pressure on him to service debts, particularly from a “private equity” partner, who was forcing him to “buy back shares”. He had also accused a “previous DG [director gerenal] income tax” of “a lot of harassment”.

The board of the listed Coffee Days Enterprises Ltd, however, told the BSE that the authenticity of the letter was unverified and resolved to investigate the matter. “The Board took cognizance of statements in the purported letter from Mr. V. G. Siddhartha relating to financial transactions outside the knowledge of the senior management, auditors and the Board. 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. V. G. Siddhartha, the Board took serious note of the same and resolved to thoroughly investigate this matter,” the company told the stock exchange on July 31.

Reacting to the letter written by Siddhartha, office of the principal chief commissioner of income-tax, Karnataka & Goa, in a press statement on July 30 questioned the authenticity of the letter. “The investigation in the case of Shri V G Siddhartha and Cafe Coffee day (CCD) arose from the search in the case of a prominent political leader of Karnataka. It is based on the unearthing of a credible evidence of financial transactions done by the CCD in a concealed manner,” the release said.