KKR India chief executive Sanjay Nayar has resigned from the board of Coffee Day Enterprises Ltd, the operator of the Café Coffee Day chain, and its subsidiary Coffee Day Global Ltd.
Nayar resigned on Monday and the board accepted his resignation on Wednesday, Coffee Day Enterprises said in a stock-exchange filing. It didn’t specify any reason for his resignation.
Nayar had joined the coffee chain’s board after KKR’s investment in the company in 2010. The private equity firm owns a 6.07% stake in Coffee Day. Two other PE firms own a stake in the Bengaluru-based company—Rivendell holds 10.61% and Affirma Capital 5.67%.
Affirma Capital is the firm that now manages the portfolio of Standard Chartered Private Equity while Rivendell manages the old New Silk Route fund that had invested in Coffee Day.
The PE investors were put on the defensive after Coffee Day plunged into turmoil at the end of July following the death of founder VG Siddhartha, who apparently committed suicide. A letter, purportedly written by Siddhartha, had mentioned an unnamed PE partner as pressuring him into a share buyback, and “harassment” from tax authorities, among other reasons for the suicide.
On Wednesday, the coffee company said its board had appointed Ashok Kumar, a former deputy inspector general of the Central Bureau of Investigation on August 30 to investigate the statements made by Siddhartha. Kumar is also scrutinising the books of the company and its subsidiaries, Coffee Day said, adding that the investigation is likely to take a few more weeks.
The company also said that it couldn’t submit its audited financial results for the quarters ending June 30 and September 30 because of an ongoing investigation into Siddhartha’s death. However, it said it was disclosing management-compiled financial statements for the first quarter of this fiscal year for both Coffee Day Enterprises and unit Coffee Day Global.
Separately, Coffee Day Enterprises had appointed IDFC Securities Ltd to explore divestment opportunities for the group as well as to refinance its existing debt. Coffee Day Global has now authorised its director Malavika Hegde to finalise agencies for commercial, legal and financial due diligence towards speeding up the process of divestment of stake in the company.
The group has been in talks to liquidate some of its assets. In August, PE giant Blackstone acquired its Benguluru tech park for close to Rs 3,000 crore.