Even before the body of coffee-chain tycoon V.G. Siddhartha was recovered from a river in southern India this week, the financial strains that appear to have led him to take his own life were beginning to emerge.
A letter purportedly written and signed by Siddhartha and sent to senior management of Coffee Day Enterprises Ltd. laid out in stark words his struggles with a “serious liquidity crunch” that in turn had led to “tremendous pressure” from lenders and an unnamed private-equity investor.
“I would like to say I gave it my all,” Siddhartha wrote. “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 gave up.” He sent the note to the board on July 27. Two days later, the executive was reported missing after telling his driver he’d go for a stroll.
Siddhartha’s death marks a tragic turn for an admired member of India’s business elite and an executive closely connected to the highest echelons of the political sphere. Over the course of more than two decades, Siddhartha built a java empire that now boasts more than 1,700 stores — ten times as many outlets as Starbucks Corp. in India — as well as 54,000 vending machines, almost single-handedly introducing his tea-loving country to coffee shops and making his Cafe Coffee Day chain a household name.
But what was less known was that for all his company’s scale and ubiquity; Siddhartha struggled with a mounting financial burden. A review of the public disclosures of Siddhartha’s personal debt reveals how he spent much of the two years before his death putting up ever more of his Coffee Day shares to refinance loans for ever shorter periods, at ever higher rates of interest.