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Indian coffee industry tycoon goes missing, investors spooked

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The founder of the Cafe Coffee Day chain, V.G. Siddhartha, went missing on Tuesday, with media reports citing a letter purportedly written by him that said he gave in to pressure from lenders and tax authorities.

The founder and largest shareholder of India’s biggest coffee-chain owner was not reachable since late Monday, his flagship entity Coffee Day Enterprises said in a regulatory filing.

The company’s stock tumbled 20 per cent to its lowest ever as investors fretted about the contents of the letter.

Police officials said he was last spotted on Monday night on a bridge over a river near Mangaluru, a port city about 350 kilometers from India’s tech hub of Bengaluru.

Siddhartha asked his driver to wait for him on a bridge while he took a walk, police official Hanumantharaya said.

When he did not return, the driver alerted the police.

Local authorities said that Siddhartha had still not been found as of 1630 IST. Indian television channels showed rescue workers in rubber boats scouring the Nethravathi river near the bridge where Siddhartha, who hails from a coffee-growing family, was last seen.

Some Indian media reports speculated Siddhartha was under pressure over outstanding debts.

The letter blamed an unnamed private equity partner for pressuring him into a share buyback and tax authorities for “harassment” and decisions that hurt the company’s liquidity.

“I fought for a long time, but today I gave up,” Siddhartha allegedly wrote in the letter, which was available on social media and published by media here

Reuters was unable to independently verify the authenticity of the letter and its contents.

One board member said that they had not personally received the letter and could not comment on its authenticity.

Coffee Day said in a filing to the exchanges that its board was reviewing a copy of the July 27 letter and had shared a copy with relevant authorities.

U.S. private equity investor KKR, which owns slightly more than six per cent of the company, said in a statement that it was “deeply saddened by the developments.”

Siddhartha owns a direct stake of 32.75 per cent in the company, which has some 1,700 outlets that brew cappuccinos and lattes for India’s booming moneyed class and competes with the world’s biggest coffee chain Starbucks.

Together with his family and holding companies, he controls 53.93 per cent of the firm.

As of June 30, Siddhartha, his family and their holding companies had pledged or encumbered about 75.7 per cent of their stake in Coffee Day toward various borrowings.

And Coffee Day’s 2018 annual report showed Siddhartha had also personally guaranteed most of the borrowings.

He also recently sold about 20 per cent of his stake in tech firm Mindtree (MINT.NS) to engineering and construction firm Larsen & Toubro Ltd (LART.NS).

Siddhartha was in talks with Coca-Cola (KO.N) to sell CCD for as much as 1.45 billion dollars, The Economic Times reported last month.

Investors were jittery as the letter mentioned hidden transactions, with the news coming at a time when India’s banking sector is already wrestling with mounting bad loans.

“My team, auditors and senior management are totally unaware of all my transactions. The law should hold me and only me accountable,” the purported letter read.

It did not provide further details on the transactions.

Coffee Day’s net debt stood at 76.5 billion rupees ($1.11 billion) in March, according to Refinitiv data.

“This could well be another problem for lenders by turning into a default,” said Shriram Subramanian, a Corporate Governance Expert and Founder of Proxy Advisory Firm InGovern.

Coffee Day’s stock hit an all-time low on Tuesday. Shares closed at 153.4 rupees, after hitting their lower circuit for the trading day.

The company sought to allay investor concerns, saying earlier on Tuesday that it was “professionally managed and led by competent leadership team, which will ensure continuity.”

A board member said another meeting would be held on Wednesday at 0530 GMT (11 a.m. local time). (Reuters/NAN)

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Foreign

Indian companies continue to cut staff at fastest pace in May: PMI data

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Indian companies reduced staff at the quickest pace in May as per the Purchasing Managers Index (PMI) survey released Monday reporting a second consecutive month of decline, but marginally up following April’s record decline.

The rate of workforce contraction accelerated to the fastest in the survey’s history, eclipsing the previous record set in April, according to a statement by IHS Markit, a London-based global information provider that compiles the PMI survey.

The weak demand due to the COVID-19-led disruption ensured lower production, forcing domestic manufacturers to reduce workers during the month under review, said the statemen.

“The further reduction in May highlights the challenges that businesses might face in the recovery from this crisis, with demand remaining subdued while the longevity of the pandemic remains uncertain,” said Eliot Kerr, an economist at IHS Markit.

The seasonally adjusted PMI index in May rose marginally to 30.8 from 27.4 in April, but lower than 52.7 in May last year. A figure of above 50 indicates expansion, while a sub-50 print signals contraction.

Faced with a further deterioration in demand conditions, companies continue to cut back production midway through the second quarter, but the severe reduction was slower than April’s unprecedented decline, the statement said.

Raw-material prices continued to fall, as suppliers cut prices in an attempt to secure orders. The benefit of lower cost was passed on to the customers.

Indian manufacturers remained optimistic towards the one-year business outlook, anticipating a return of growth once all coronavirus-related restrictions are relaxed. The degree of positivity eased slightly from April and remained historically subdued, the statement said.

Asia’s third largest economy had been under a nationwide lock down for the past two months that is now being extended by one more month in containment zones and some red zones of metro cities till June 30.

(XINHUA)

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Metro

Air Peace airlifts 312 Indian nationals 

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Nigeria’s major carrier, Air Peace, has evacuated 312 Indian citizens from Nigeria back to their country in a 10-hour non-stop flight.

Mrs Oluwatoyin Olajide, the Chief Operating Officer of the airline, announced in a statement in Lagos on Sunday.

Olajide said that the flight, which departed on Sunday, May 31, from the Murtala Muhammed International Airport, Lagos, operated with a B777 aircraft with registration number 5N-BWI.

She said the flight, operated by 15 crew members, was expected to arrive Cochin International Airport in Kerala.

The Chief Operating Officer, while expressing delight over the evacuation flight, thanked the Indian authorities for engaging Air Peace to operate the flight.

She also gave kudos to the Federal Government for supporting the airline in all its special flights during the lockdown.

She added that the airline alongside other relevant government agencies ensured that all the passengers complied with established health protocols before boarding.

The News Agency of Nigeria reports that on May 28, Air Peace evacuated 301 Chinese from Murtala Muhammed International Airport, Lagos, and flew back 268 stranded Nigerians from China on May 30.

Edited By: Tayo Ikujuni/Wale Ojetimi (NAN)

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Foreign

Indian states ban consumption, spitting of tobacco in public places to prevent COVID-19

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Indian states are on a spree to ban consumption, spitting and smoking of tobacco and tobacco products in public places following a directive by federal government to all states in the country.

On Saturday, India‘s western state of Maharashtra and South-Western state of Karnataka announced a ban following a similar ban announced by the Northern state of Rajasthan and North Eastern state of Jharkhand.

“Spitting also contributes to spreading Covid-19. Considering this, we have decided to implement the prohibitory laws more strictly. Violators will have to pay a fine of 13 dollars for first offence, 40 U.S. dollars for second and 66 U.S. dollars for subsequent offence,” Rajesh Tope, Maharashtra health minister said.

Maharashtra is the worst affected Indian state with over 62,000 positive COVID-19 cases and its political capital Mumbai tops the list among cities in Asia’s third largest economy with close to 37,000 positive cases so far.

Earlier this month, India’s federal health minister appealed to all states to ban sale of tobacco products and spitting in public places to prevent the spread of coronavirus infection.

According to Global Adult Tobacco Survey, India has the second largest tobacco users in the world with 268 million or 28.6 percent of all adults in India, and 1.2 million succumbing to tobacco-related diseases every year.

(XINHUA)

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Foreign

Indian medics team visit COVID-19 hotspot area in Bangalore

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Indian medics team visit a COVID-19 hotspot area that has been sealed during lockdown to prevent the spread of the virus in Bangalore, India, May 29, 2020. (Str/Xinhua)

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Politics

COVID-19: Lagos discharges 27 Nigerians, 2 Indians

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The Lagos State Government says 29 additional coronavirus patients, comprising two Indians and 27 Nigerians have been discharged from its isolation centres.

Gov. Babajide Sanwo-Olu made the announcement in a statement on Friday.

He said that a total of 854 patients had now been discharged in the state.

Today (Friday) 29 COVID-19 Lagos patients; 24 males and 5 females, including two Indians were discharged from our Gbagada, Lekki and Agidingbi isolation facilities to reunite with the society.

”The patients, 20 from Gbagada, 6 from Lekki and 3 from Agidingbi Isolation Centres were discharged, having fully recovered and tested negative to COVID-19.

”With this, the number of COVID-19 confirmed cases that have been successfully managed and discharged in Lagos is now 854,” Sanwo-Olu said.

Edited By: Kamal Tayo Oropo/Silas Nwoha (NAN)

 

 

 

 

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Foreign

Indian economy grows at slowest pace in 8 years in Jan-March, 11-year low for the fiscal year

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Indian economy grew at its slowest pace in eight years at 3.1 percent for the fourth quarter of Jan-March and at 11-year low of 4.2 percent for the fiscal year 2019-20 (April-March) widening the fiscal deficit, as per the government data released on Friday evening.

The declining growth has widened the fiscal deficit by 80 basis points to 4.6 percent against the target of 3.8 percent leaving limited space to provide further economic relief to the beleaguered economy hit by the COVID-19 crisis, experts said.

Earlier, the Indian government had offered a stimulus package of 264 billion U.S. dollar and the country’s Central Bank cut policy rates by cumulative 115 basis points since the pandemic broke out.

In the preceding quarter of October-December, India had reported a growth of 4.7 percent while for the previous fiscal year it stood at 6.1 percent.

Asia’s third largest economy has been under nationwide lock-down for close to eight weeks bringing the entire economy to a standstill. However, the full impact of the lock-down will only be felt in the April-June quarter as it was only made effective from March 25.

“Higher-than-expected growth in Q4 FY2020 should not be viewed with relief, as this data is constrained by the availability of earnings in many sectors, and is thus subject to considerable downward revision at a later stage in our view, especially for manufacturing and construction,” said Aditi Nayar, Vice President and Principal Economist of ICRA – a credit rating agency.

The widening fiscal deficit is expected to contribute to a spike in G-sec yields, she said.

“The fact that Manufacturing sector has grown at 0 percent for the whole of FY20 vs 5.7 percent in previous year highlights the extent of issues in that sector and prompts faster and thorough measures to kickstart manufacturing given that the first two months of FY21 are washouts and job creation remains a top priority in the current times,” said Dhiraj Relli, MD & CEO of HDFC Securities, a domestic stock brokerage house.

In view of the global COVID-19 pandemic and consequent nationwide lockdown measures implemented since March, 2020, the data flow from the economic entities has been impacted. As some of these units are yet to resume operations and owing to the fact that the statutory time-lines for submitting the requisite financial returns have been extended, the government statement said.

(XINHUA)

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Judiciary

3 in court over alleged cultism, possession of Indian hemp

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Three men were on Friday arraigned in an Ado-Ekiti Magistrates’ Court over alleged cultism and possession of Indian hemp.

The defendants-Adeuyi Babatunde, 22; Sunday Mawo, 40; and Kehinde Adewole, 36, are facing a two-count charge of  cultism and possession of Indian hemp.

The prosecutor, Sgt. Olubu Apata, told the court that the defendants committed the offence on May 17 at Aisegba Ekiti in Gbonyin Local Government Area of Ekiti.

He alleged that the defendants were members of Eiye confraternity.

Apata also alleged that weeds suspected to be Indian hemp was found in the possession of the defendants.

He said the offences contravened Section 4 (i) of the Secret Cult Abolition Law 2017 and punishable under Section 5(b) of the Indian Hemp Act.

The pleas of the defendants were not taken while the prosecutor urged the court to remand them in prison custody.

The defence counsel, Mr Olatunde Olayemi, applied for his clients’  bail, promising that they would not jump bail.

The Magistrate, Mrs Kehinde Awosika, in her ruling, granted the defendants bail in the sum of N50,000 with one surety each in like sum.

Awosika adjourned the case till June 3 for mention.

(
Edited By: Remi Koleoso/Mufutau Ojo) (NAN)

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Foreign

Indian PM meets home minister as 4th phase of COVID-19 lockdown nears completion

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Indian Prime Minister Narendra Modi on Friday met federal home minister Amit Shah to discuss the ongoing lockdown strategy and the measures to move ahead, local media reported.

The meeting comes on the day as India recorded 7,466 COVID-19 new cases, so far the highest single-day spike, pushing the infection tally across the country to 165,799.

The meeting also assumes significance as the fourth phase of the ongoing lockdown nears completion by the end of this week.

Shah on Thursday spoke to all chief ministers and sought their views on the extension of nationwide lockdown beyond May 31. Reports said the chief ministers contended that the lockdown should be extended with considerable relaxation in economic activity.

In the last extension of the lockdown in mid-May, the government had allowed some relaxations and leaving further on states to decide what remains shut.

Friday marks the 66th straight day of the ongoing lockdown across the country announced by Modi to contain the spread of the pandemic.

The lockdown, which was announced on March 25, has been extended thrice.

(XINHUA)

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Foreign

Part of Indian parliament building sealed after official tests positive for COVID-19

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Two floors of the Indian parliament annexe building were sealed Friday after an official posted at the secretariat of the upper house of parliament, locally called Rajya Sabha, tested positive for COVID-19, local media reports said.

The official of the rank of director attended office on Thursday and was found positive for the infection along with his family members, wife and children.

This is the second case of COVID-19 reported from the parliament’s annexe building. Previously an official of the lower house of parliament, locally called Lok Sabha, secretariat was found positive for COVID-19.

Reports said the floors would be fumigated as a precautionary measure.

Earlier several government offices and buildings were sealed for a day or two after detection of COVID-19 cases there.

India on Friday reported 7,466 new COVID-19 cases, the highest single-day spike so far, during the last 24 hours, pushing infection tally across the country to 165,799.

Friday marks the 66th straight day of ongoing lockdown across the country announced by Prime Minister Narendra Modi to contain the spread of the pandemic.

The lockdown, which was announced on March 25 to break the chain of spreading the infection, has been extended thrice and is scheduled to end on May 31.

(XINHUA)

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