Coffee Day Enterprises probe finds $270 million missing from its accounts

Hemai Sheth | | Updated on: Mar 16, 2020
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The months-long probe into Coffee Day Enterprises Ltd., initiated by its board after the death of founder V G Siddhartha has found at least $270 million missing from the company’s accounts, Bloomberg reported on Monday.

The draft report of the investigation that is longer than a hundred pages is likely to conclude that at least $270 million is missing from the firm’s accounts, the report said.

The board of Coffee Day Enterprises has appointed EY in August to investigate the circumstances leading to statements made in a letter written by former Coffee Day Chairman, VG Siddhartha to the company’s board members and employees prior to his death.

The letter had laid out his struggles with a serious liquidity crunch due to mounting debts and alleged “harassment by tax authorities” that had resulted “tremendous pressure” from lenders and an unnamed private-equity investor.

The months-long probe followed Siddhartha’s death in July and examined the financial transactions of his firm.

In a filing with BSE in January, the company had said that there will be a delay in releasing the unaudited results for the first and the second quarter of the fiscal citing the ongoing probe.

“The said assignment is under progress and is likely to take a few more weeks for completion,” it had said.

The BSE had sent a notice to the firm warning suspension of trading of the company shares if the quarterly results were not released by January 29. BSE and NSE suspended trading of the company shares in February for not complying with listing norms.

Coffee Day Enterprises has posted a net loss of ₹154 crore for the second quarter of this fiscal in its unaudited results filed in January. Coffee Day Global, the company’s coffee business, posted a net loss of ₹73 crore, while revenues were down 5.5 per cent in its unaudited management-complied standalone results.

The report into the probe is likely to be released as soon as next week, Bloomberg reported.

Published on March 16, 2020

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