CCD appoints Ex-Judge to oversee recovery of Rs 3,535 cr from MACEL

The Coffee Day Group has appointed Justice K L Manjunath, an EX-Judge of the High Court of Karnataka, to "suggest & oversee actions" for recovery of over Rs 3,500 crore allegedly diverted by the late founder V G Siddhartha to his personal firm MACEL.

In July, an investigation report, which was formed to investigate into the circumstances that led to the alleged suicide of Siddhartha, the owner of the Coffee Day group, revealed Rs 3,535 crore siphoned off from the company by the entrepreneur's personal firm Mysore Amalgamated Coffee Estates Limited (MACEL).

The investigation report was submitted during a board meeting of the company on July 24, in which the chairman was authorised to appoint a former Judge of the Apex Court or any HC to suggest & oversee actions for recovery of the dues from MACEL & to help on any other associated matters.

Coffee Day Enterprises Ltd (CDEL) in a regulatory filing said that "Now, the board of directors of the company in meeting held on 21st August 2020, appointed Justice K L Manjunath, Ex-Judge of High court, Karnataka to suggest & oversee actions for recovery of the dues from MACEL & to help on any other associated matters".

On Aug 30, 2019, CDEL had appointed former deputy inspector general of CBI Ashok Kumar Malhotra to investigate into the circumstances leading to the statements made in the letter of Siddhartha dated July 27, 2019, & to scrutinise the books of accounts of CDEL & its subsidiaries.

The probe gave a clean chit to the tax department that was being alleged to have harassed Siddhartha.

The investigation report had stated that Siddhartha's "MACEL owes a sum of Rs 3,535 crore to the subsidiaries of Coffee Day Enterprise Ltd".

Of this, "a sum of Rs 842 crore was due to these subsidiaries by MACEL as on March 31, 2019, as per the consolidated audited financial statements. Therefore, a sum of Rs 2,693 crore is the incremental outstanding that needs to be addressed," it said.

The company had said it was taking steps for recovery of dues from MACEL, while disclosing the findings of the investigation.

CDEL consists of 49 subsidiaries.

It said that "MACEL, an entity on the personal business side of Siddhartha had a continuing business relationship with subsidiary companies of CDEL. MACEL was paid advances by subsidiary companies of CDEL. The amounts were sent to MACEL through normal banking channels".

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