BENGALURU: Coffee Day Enterprises named S.V. Ranganath as interim chairman after founder V.G. Siddhartha was confirmed dead by the police on Wednesday.
Ranganath is currently a non-executive independent director.
The company has also set up a committee that will be vested with the powers of the chief executive and explore opportunities to deleverage the Coffee Day Group, the company said here.
Authorities in Karnataka recovered the body of coffee baron V.G. Siddhartha floating in a river on Wednesday, two days after his disappearance sparked speculation that he was under intense financial strain.
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.
While the authenticity of the letter has still not been verified, the board has taken serious note of its contents and will thoroughly investigate the matter, the company said.
Shares in Coffee Day hit their lower limit for the trading day and plunged 20% to a fresh all-time low of 122.75 rupees on Wednesday, fresh off the back of another 20% slide on Tuesday.
“I think the company, its brand, its franchise has value, if it gets sold to an external buyer,” said Deepak Jasani, a senior vice-president at HDFC Securities. “A lot will depend on whether and when the board or top management takes a call on selling the business or not.”