பொருளாதாரம் - Finance

The rise and fall of an Indian Dreamer named VG Siddhartha (founder – Cafe Coffee Day )

 

Coming from a family that has a 140-year history of growing coffee and Inspired by a talk with a German coffee shop owner Tchibo , an aspiring entrepreneur set his target for the Indian version of ‘Starbucks’ with full of dreams.

What seemed to be an altogether new concept for the people of India at that time, a brand named “Cafe Coffee Day “ was born to prove them it was possible.

It’s now the largest chain of coffee shops in India, with 1,750 cafes in more than 200 cities, including outlets in Prague, Vienna and Kuala Lumpur.

But in today’s competitive world, the brands are big but the operational challenges are enormous and this is very much aware among the entrepreneurs circle ..

One of such challenges were the rising debts and the hindrances of raising fresh capital and the demands of the tax department which has pushed the ‘ Café Coffee Day ‘ chain into a financial crisis.

At a time when the Indian business scenario is seeing a lot of challenges and run away cases like businessmen Vijay Mallya and Nirav Modi, VG Siddhartha, owner of Café Coffee Day , dint choose to run away but rather took the extreme steps and ended his life which was confirmed after massive search operation concluded on 31/07/2019.

 

 

 

Two days before taking this extreme step, he had written a letter to the Board of Directors of which the important points are mentioned below :

1.     He acknowledged that his business model failed.

2.     He indicated that around 50000 jobs were created by him for the economy and also his genuine efforts to change the life’s of his employees by giving them an opportunity to grow.

3.     A genuine sorry for his stakeholders.

4.     The pressure he received from his private equity partners,lenders , and director general of income tax.

5.     A motivation for the stakeholders to be strong and continue the business

6.     Taking full responsibility for everything which went wrong.

7.     Taking full responsibility for all the financial transactions that has taken place in the organisation.

8.     Safeguarding the top management , the auditors and his team by telling that they were unaware of these transactions.

9.     A Clarification that his intention was never to cheat anyone.

10. Giving a solution for the situation by attaching the details of assets and indicating that it far outweighs the liability of the company .

And concluded with a hope that someday someone will understand what he has gone through…

There are lot of life lessons which we can learn from VG Siddhartha, who took all the  responsibility of the crisis and safeguarded everyone involved in it .

He may have failed as an entrepreneur, but he has excelled as a leader by not playing the blame game .

The tag line of cafe coffee day reads as

“A Lot Can Happen Over a Cup of Coffee 

If we can replace ” a  cup of coffee” in the above  tag line with “life “ then VG Siddhartha story will be the most apt example.

Based on the above story the question which lingers over , is who is to be blamed for this tragic event ? I would say that our financial system and the way our society views such entrepreneurial failures.

  

 To conclude….

The usual stereotype prevailing in the society is to always win in the business world or else he is considered as not a fit entrepreneur.

But starting a business itself is a part of victory in the foreign culture, and failing in the business is considered totally normal, and they move forward by learning from their mistakes .Hence there is a need for a paradigm shift in the way we look at these entrepreneurs.

What I would like to suggest at this prevailing economic atmosphere is that, the government and the regulatory bodies should now take a soft approach towards genuine defaulters and give them an opportunity to restructure the loans and increase the payment tenure.

A change cannot be done from one side and we as a society should also promote these budding entrepreneurs and give them an edge over their foreign competitor.

Also what we have to remember is , when our intentions are right and our hard works are involved and faith of some form of superior power is there , then time will answer the questions which we are unable to answer during our difficult times

But somewhere when the element of faith for a better future vanishes, then the suicidal thoughts takes its position and forces us to take such extreme steps.

Hence what  VG Siddhartha has done is not justifiable, but why he did it is justified.

                                             “Lesson Learnt”

 An article by Mohamed Afzal B.COM CA-FINAL

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