scorecardA former Prime Minister cried on national TV for VG Siddhartha-- the untold tales of politics and privilege may die with India’s coffee baron
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A former Prime Minister cried on national TV for VG Siddhartha-- the untold tales of politics and privilege may die with India’s coffee baron

A former Prime Minister cried on national TV for VG Siddhartha-- the untold tales of politics and privilege may die with India’s coffee baron
Business5 min read
The death of VG Siddhartha has shocked one and all. The stock broker-turned-coffee baron’s body was found today, two days after he went missing on Monday (July 29). The share price of Coffee Day Enterprises has lost over ₹1,500 crore (over $200 million) in value in the two days.

Not just the corporates, even politicians of all colours paid their respects to him. Former Prime Minister HD Deve Gowda, who hails from Karnataka, even broke down on national television.

India’s coffee king VG Siddhartha (1959 to 2019) is being remembered as the man who brought coffee culture to India before Starbucks. The promoter of Coffee Day Enterprises was a sharp businessman taken out by bad times, allegedly by aggressive taxmen. He was someone who played a silent but significant role in shaping India’s IT revolution, and benefited from it hugely.

He was loved by the close-knit and elite Bengaluru corporate circuit of which Siddhartha was an influential member for more reasons than one.

However, he is barely getting any credit for being just as savvy politically as in business. He had friends across parties and made strong connections. It seemed that way until his mysterious disappearance on July 29 and the discovery of his dead body in the Netravathi river two days later. The grief of all leaders from all parties once again underscored the point.

Taxing times

Siddhartha accused taxmen of harassing him in a letter that he sent to the Board of Directors of his company before he went missing, which led many to blame ‘tax terrorism’ for his plight.

The Income Tax Department countered saying that the millionaire businessman admitted to having ₹480 crore of unaccounted wealth. However, he did not reveal the source or pay the tax due on that money until his death, according to the department.

Siddhartha’s harassment charge at the tax department came at a time while his father-in-law SM Krishna is with Bharatiya Janata Party (BJP), that’s ruling at the centre and state. He switched his allegiance to the BJP in 2017 after being in the rival Congress camp for 46 years.

However, Krishna was conspicuous in his silence during the chaotic political power play in Karnataka over the last few weeks. The bitter battle for power was eventually won by his party BJP, and BS Yediyurappa was sworn in as the Chief Minister on July 26, three days before Siddhartha’s disappearance and death.

One of the many who were holding off Yediyurappa from claiming power was Congress leader DK Shivakumar, a political mastermind from Karnataka who put up a fervent fight against the BJP. He is also a close friend of Siddhartha. Therefore, Shivkumar’s outburst soon after Siddhartha went missing was not surprising.

Shivakumar too, has a tax case against him and his premises were raided in 2017 by officials who unearthed unaccounted cash of ₹300 crore and, shockingly, copies of a diary allegedly maintained by his rival Yediyurappa.

From Shivakumar to Yediyurappa to Kumaraswamy, people across the political spectrum are grieving Siddhartha’s untimely death. It is also a testament to the fact that in India, businessmen cannot thrive without politically astute connections.

The Rajkumar Ransom

Both the success of his ventures and his father-in-law’s power made Siddhartha important in Karnataka. When S M Krishna’s government was frantically coming up with a massive ransom necessary to free Rajkumar, the Kannada superstar who was kidnapped by Veerappan in 2000, Siddhartha came to help.

According to an account, Siddhartha was one of the five people in the room that included the then CM Krishna, Mallikarjun Kharge, and Abdul Karim Telgi. Telgi is better known for his $2.9 billion fake stamp paper scam, and was acquitted from it, after his death, for lack of evidence.

The government of Karnataka at the time insisted that it had paid for Rajkumar’s release from Veerappan, a dreaded bandit who modelled himself after Robin Hood.

However, it has been alleged many times that both government and private money were paid to secure the release of the actor, while thousands of Rajkumar’s fans took to the streets to protest, violently at times.

The role and involvement of Siddhartha may remain unclear. The length of the arm between Chief Minister Krishna and his son-in-law in state matters may remain anybody’s guess.

While the details of Siddhartha's political prowess may remain unknown, his achievements in business have been celebrated abundantly.

Coffee estate to real estate

India has always had coffee houses, in the big cities at least, where for decades thinkers, lovers, and revolutionaries have hung out. Siddhartha’s chain Cafe Coffee Day (CCD) brought the 21st century colours to this culture.

An employee prepares coffee for customers at a Cafe Coffee Day outlet in Mumbai

It may have helped that his father-in-law SM Krishna -- Chief Minister of Karnataka between 1999 to 2004 -- was a man with massive political clout at the time. However, Siddhartha’s privilege does not take away the credit due for his business acumen.

There are many who own estates in Karnataka’s coffee belt but it was Siddhartha who made the right moves at the right time and CCD became the go-to place for young Indians at the turn of the century long before competitors woke up to the opportunity.

Privileged and benevolent

Siddhartha not only built his own empire of coffee chains, real estate, financial services and logistics, he also supported entrepreneurs who went on to become icons in their own right. Infosys is a shining example, which went on to be the first poster boy of India’s IT revolution. However, the company didn’t have enough takers for its shares at the time of its IPO. Siddhartha, who was a stock broker in Bengaluru at the time, had underwritten those shares and bought them. He made a lot of money out of it but only because he knew their worth when no one else did.

Infosys and Mindtree are only two of the many examples were Siddhartha backed entrepreneurs.

He owed a lot of his wisdom and foresight to the training he received under Mahendra Kampani (1959 to 2017), one of the stars of India’s stock market, who was the sitting member of the governing board at the Bombay Stock Exchange (BSE) until his death in a car crash in 2017.

After his Masters in Economics, Siddhartha got his early training at JM Financial under Kampani in 1983-84. Those two years of training and some capital from his father made him an independent broker in Bengaluru later. It was then that he underwrote the shares of Infosys and profited from the investment.

The other ventures and profits followed this initial success. However, one may wonder if he could have built his fortune as a businessman in India without being just as savvy politically.