26 crore fine on Cafe Coffee Day, 3400 crores will be recovered, 3 years ago the chairman committed suicide, what is the whole matter
SEBI has imposed a fine of Rs 26 crore on CCD’s parent company Cafe Day under 2 different sections. The case pertains to a fraud of Rs 3535 crore, which came to light after the suicide of VG Siddhartha, former chairman of the company.
Highlights
- VG Siddharth, former chairman of Cafe Coffee Day, committed suicide in 2019.
- He had told the debt in the suicide note as the reason for this.
- He had withdrawn 3535 crores from Cafe Day and sent it to his private company.
New Delhi. Securities and Exchange Board of India ie SEBI has imposed a fine of Rs 26 crore on Coffee Day Enterprises Limited on 24 January. Coffee Day Enterprises Limited (CDEL) is the parent company of Indian coffee restaurant China Cafe Coffee Day (CCD). Apart from imposing the fine, SEBI has also ordered the company to appoint a law firm in consultation with NSE to settle the dues of Rs 3,424 crore.
A fine of 25 crores was imposed on the company under section 15HA of the SEBI Act. While a fine of Rs 1 crore has been imposed under 15HB. The first section deals with illegal business activities while the second one deals with the provision of penalty.
What is the whole matter
So far, whatever picture has been clear in this case, one thing emerges that Siddhartha has withdrawn Rs 3535 crore from the account of 7 subsidiary units of Coffee Day and transferred it to his private company Mysore Amalgamated Coffee Estate Limited (MACEL). were put He wanted that the outstanding dues of private investors on MACEL should be abolished. However, the documents show withdrawal of only Rs 842 crore and no information was available about the remaining Rs 2693 crore. So far, out of this dues, only Rs 110 crore has been recovered. SEBI has taken this step expressing displeasure on this matter and has said that if it continues like this then the amount will never be recovered.
Committed suicide in 2019
Let us tell you that Coffee Day founder VG Siddhartha committed suicide in 2019. He had given his life by jumping into a river. His body was recovered from his house after being missing for 2 days. In the letter he had written before the suicide, he had said that he fought for a long time but now he accepts defeat.
Coffee Day had a liability of 7200 crores
Coffee Day Enterprises also had liabilities of Rs 7200 crores. Which have been reduced by selling assets. The company raised Rs 2700 crore by selling Tech Park in Bengaluru and Rs 1800 crore by selling shares in tech company Mind Tree and has used it to repay the debt. Now the liabilities of about Rs 3200 crore are left on Coffee Day.
