-- Letter sparked speculation of financial strain
-- Siddhartha brought coffee culture to India
-- Coffee Day Enterprises shares plunge 20%, all-time low
Authorities in Southern India recovered the body of coffee baron VG Siddhartha floating in a river on Wednesday, two days after his disappearance sparked speculation he was under intense financial strain.
The recovery of Siddhartha's body unnerved investors in his flagship listed Coffee Day Enterprises Ltd and sent its shares plunging to an all-time low on Wednesday.
Siddhartha was travelling to Mangaluru, a port city about 350 km (218 miles) from India's tech hub Bengaluru, on Monday when he asked his driver to wait for him on a bridge while he went for a walk, according to police.
When Siddhartha did not return, the driver alerted police.
"We found the body about half a kilometre from the sea," said Ritesh D’Souza, 34, a local fisherman who helped retrieve Siddhartha’s body. Authorities declined to say whether they were treating his death as suicide or foul play.
Siddhartha, 59, was widely recognised for having brought the coffee shop culture to largely tea-loving India and he was also hailed as one of the country's early venture capital investors.
A letter, purportedly written by Siddhartha and addressed to his board and employees, said he "gave up," blaming an unnamed private equity partner for pressuring him into a share buyback and tax authorities for "harassment" and decisions that caused a liquidity crunch.
Siddhartha's letter also mentioned hidden transactions that even auditors and senior managers were unaware of. Reuters was not able to confirm the authenticity of the letter, which was available on social media and published by local media.
India's opposition parties on Wednesday seized on the letter, accusing Prime Minister Narendra Modi's administration of spooking businesses with heavy-handed tactics.
"His is the ugliest example of how agency persecution is wrecking India's growth story," tweeted Congress politician Milind Deora. "Hope govt reflects on its anti-business policies!"
The government did not immediately respond to a request for comment on the opposition allegations. The Income Tax department issued a statement on Tuesday saying Siddhartha had failed to disclose some income and it stressed that authorities' actions were normal.
Siddhartha, who hailed from a coffee-growing family, opened his first coffee shop in 1996, more than 10 years before global coffee shop giant Starbucks began its foray into the country. His Cafe Coffee Day chain has boasts more than 1,600 outlets servicing a burgeoning middle class.
Siddhartha, who owns a direct stake of 32.75% in Coffee Day Enterprises, was also widely seen as a savvy investor who made some prescient early investments in Indian IT service firms like Infosys Ltd and Mindtree in the 1990s, years before global firms began to bet on Indian startups.
But his Coffee Day Enterprises Ltd recently faced queries over outstanding debt, competition from trendier rivals, and scrutiny from tax authorities over unpaid dues.
Siddhartha, his family and their holding companies pledged or encumbered about 75.7% of their stake in Coffee Day toward various borrowings. And Coffee Day's 2018 annual report showed Siddhartha had personally guaranteed most of the borrowings.
Shares in Coffee Day plunged 20% on Wednesday to a new all-time low of 122.75 rupees, fresh off the back of another 20% slide on Tuesday.