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Why entrepreneur CCD founder Siddhartha ended up the way he did

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On Wednesday, the coffee square on Vittal Mallya road in Bengaluru where the headquarters of Café Coffee Day (CCD) stands wore a desolate look. It was a quiet day, interspersed by the occasional arrival or exit of grim-faced senior executives.

Things have been rather tense ever since news emerged early on Tuesday morning that CCD’s founder Chairman VG Siddhartha was missing, and may have killed himself unable to bear the financial pressure he was under. His body washed up on the shores of Nethravati river early on Wednesday morning.

How did things come to such a sorry pass for a man labelled “India’s coffee king?” While there are many explanations proffered, a cursory reading of the group’s holdings indicate that while assets exceed liabilities, the issue seems to be an old one which has plagued ambitious entrepreneurs— excessive borrowing.

As of 31 March 2019 Coffee Day Enterprises Ltd (the holding company) had a debt of Rs 6547.38 crore. It wasn’t clear whether this includes Rs 2100 crore the company would have received net of taxes and expense after it sold the 20.41% stake it held in MindTree Consulting to L & T for Rs 3269 crore. Company officials did not respond to a request for comment. According to publicly available data as of June 2019, 75.70% of the promoter group’s holdings in Coffee Day Enterprises were pledged to lenders.

Share prices of most companies have fallen in the past months and Coffee Day’s were no exception. In the last three months alone, the company’s shares have fallen nearly 46%.

Trading in the scrip was halted on Wednesday after it was breached the lower circuit after plunging 20% on Tuesday.

A former senior associate of Siddhartha who is now an investor in startups claimed that the latter was looking to raise funds, but with little success. With funds failing to materalise and unable to liqudate the vast real estate holdings of the group, Siddhartha was staring down the barrel.

In the 27th July letter addressed to the board, in which Siddhartha indicated that he was giving up, he provided an estimate of what he thought the various group businesses are worth. By his own assessment the group’s assets seem to be in the range of Rs 15,000 crores and liabilities, less than half of that.

However, unable to service the growing mountain of debt and to liquidate his assets in a tough market, he seems to have decided to end it all.

On Wednesday, the board in a notice to the stock exchanges announced the appointment of S V Ranganath as the interim chairman of the board and Nitin Bagmane as the COO. Ranganath is a retired senior IAS officer, a former chief secretary of Karnataka who is known to be close to Siddhartha’s father-in-law, former chief minister S M Krishna. He also was the head of Coffee Board for a brief while in the late 1990s. Ranganath was an independent director on the board of the company.

Coffee Day Enterprise Ltd also said that it had taken cognizance of the statements in the purported letter from Siddhartha relating to financial transactions outside the knowledge of the senior management, auditors and the board. It also said the authenticity of the letter is unverified and it is unclear whether these statements pertained to the company or the personal holdings of Siddhartha.

The board also indicated that it has the backing of the family of Siddhartha including his wife Malavika Hegde.

Naresh Malhotra a former CEO of Cafe Coffee Day expressed shock at the developments “He was a fine entrepreneur. Very rooted and built a globally known retail brand. I am sure the board will ensure that the legacy of Siddhartha is protected and strengthened.”

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Brazil sends Army to fight Amazon fires; Donald Trump tweets support

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Brazil’s President Jair Bolsonaro said he’s sending troops to battle fires roaring through vast expanses of the Amazon as President Donald Trump offered U.S. support to combat the disaster.

Under growing domestic and international pressure, Bolsonaro on Friday promised “zero tolerance” for environmental crimes and pledged “strong action” to control fires — many of them set by loggers emboldened by his government’s disdain for environmental oversight.

“Forest fires exist everywhere in the world and that can’t be used as pretext for possible international sanctions,” he said in a rare televised speech, adding the flames have been spreading faster this year because of high temperatures, an extremely dry season, and strong winds.

Trump tweeted on Friday evening that that he had spoken with Bolsonaro about the fires and trade between the two countries. His tweet appeared hours after French President Emmanuel Macron — who’s about to host the Group of Seven summit — accused Bolsonaro of lying about his country’s commitments to fight climate change and threatened to block the European Union’s trade deal with the Mercosur countries of South America.

“Our future Trade prospects are very exciting and our relationship is strong, perhaps stronger than ever before,” Trump said in the tweet. “I told him if the United States can help with the Amazon Rainforest fires, we stand ready to assist!”

Macron vowed to make the burning of the Amazon jungle a priority at the summit, but the reactions of not only Trump, but German Chancellor Angela Merkel, suggested that the leaders about to gather in the French seaside resort of Biarritz were not in harmony on the crisis.

Merkel publicly disagreed with Macron. Her spokesman told Bloomberg News that she didn’t think upending the trade deal would achieve Macron’s aim of slowing deforestation in Brazil. Merkel’s spokesman, however, did back Macron’s decision to involve the international community, siding with him against Bolsonaro.

Bolsonaro faces outrage abroad and at home, with protesters marching against him in Brazil’s main cities.

After a week in which the public outcry only grew louder — and as images of the flames and giant clouds of smoke continued to appear on screens around the world — he decided to deploy the Brazilian army to the Amazon. The president’s decree ordered the armed forces to carry out “preventive and repressive actions against environmental crimes” and to combat fires in the region, including indigenous territories.

“I had today an excellent conversation with President @realDonaldTrump,” Bolsonaro tweeted on Friday night. “Relations between Brazil and the U.S. are better than ever. We have a mutual desire to launch a big trade negotiation soon, aimed at promoting our peoples’ prosperity.”

Earlier Friday, the French president’s office said that it had become clear that Bolsonaro wasn’t serious about his pledges to address climate change when he spoke to world leaders at the Group of 20 summit in Osaka earlier this year.

“The president can only conclude that President Bolsonaro lied to him in Osaka,” the statement said. “Under these conditions, France is opposed to the Mercosur deal.”

The French president’s remarks provoked an angry response from Bolsonaro, who accused him of acting like a colonialist. Issues relating to Brazil should not be discussed without the country at the table, Bolsonaro added.

“The news is really worrisome, but we need to lower the temperature, there are fires in Brazil every year,” Brazilian Agriculture Minister Tereza Cristina Dias told reporters in Brasilia. “There were fires in Portugal, in Siberia, there were fires all over the world and Brazil wasn’t questioning them.”

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Photos: Robot waiters serving food at Bengaluru’s first Robot Restaurant

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Service robots line up in a corridor on the opening day of the “Robot” restaurant. These robots were earlier introduced in Chennai and Coimbatore. (Manjunath Kiran / AFP)
A menu and the order tablet are seen on the table of the “Robot” restaurant. Every table has a digital tablet, and one has to jut pick and choose, order and await their turn. Once the food was ready, the kitchen assigns a robot. (Manjunath Kiran / AFP)
A service robot delivers food to customers. On a digitally marked out path the robot heads out with the food neatly arranged on a tray. At the assigned table, she turns to greet and guide the customer to pick up the dish. (Manjunath Kiran / AFP)
Customers take pictures with a service robot. The robots are interactive and are programmed to sing birthday wishes and wishes for special occasions. So, for the Saturday launch, every robot wore a scarf and a name. The names are both dynamic and customizable. (Manjunath Kiran / AFP)
The robots are programmed to work efficiently and the staff has also undergone training from the manufacturers to attend to any issues that may arise over the course of operations. While the restaurant holds a unique appeal with its robot servers, it also lends a glimpse into one possible future for hospitality businesses and the mechanization of workforces.  (Manjunath Kiran / AFP)

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First moon image captured by Chandrayaan-2 released by ISRO

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Chandrayaan-2 on Thursday beamed the first image captured by the Vikram Lander after it entered the lunar orbit earlier this week. The image was taken at a height of about 2650 km from lumar surface.

Mare Orientale basin and Apollo craters are identified in the picture.

The crucial process of taking up soft landing of the lander ‘Vikram’ onboard the Chandrayaan-2 spacecraft will be taken up in the early hours of September 7, ISRO Chairman K Sivan said today.

Chandrayaan-2, launched on July 22 by India’s most powerful rocket GSLV MkIII-M1, had entered the Lunar Transfer Trajectory on August 14, leaving the Earth orbit.

It comprises an Orbiter, Lander (Vikram), named after the father of Indian space research programme Dr Vikram A Sarabhai, and Rover (Pragyan).

The rover is set to make the soft landing on the Moon on September 7 and if successful the mission would make India the fourth country after Russia, the US and China to achieve the feat.

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