Coffee Day Global Under Bankruptcy Process: Report
Written by Sanjay Kumar
News highlights
- Cafe Coffee Day operator, Coffee Day Global, faces corporate insolvency after IndusInd Bank’s bankruptcy petition.
- SEBI imposes an INR 26 crore penalty on Coffee Day group for fund diversion from subsidiaries.
- Coffee Day Global operates cafes in 200+ Indian cities and is involved in various coffee-related businesses.
Café Coffee Day
Coffeehouse company
- Founder: V. G. Siddhartha
- Parent organization: Coffee Day Enterprises
- Headquarters: Bengaluru
- Founded: 1996
- ISIN: INE335K01011
- Number of employees: 20,135
- Number of locations: 550 (2021)
Last week, Coffee Day Global, the operator of the Cafe Coffee Day chain, was admitted for corporate insolvency. This comes in the wake of a bankruptcy case filed against the coffee chain by IndusInd Bank, as reported by the Economic Times, citing sources.
The Bengaluru Bench of the bankruptcy court took decision to admit the company for corporate insolvency after the negotiations between IndusInd Bank and Coffee Day Global fell through, according to ET’s Maulik Vyas and Sangita Mehta.
However, Innovative Zone Magazine has not been able to independently verify the status of the Cafe Coffee Day operator’s bankruptcy process, and there has been no official statement from the Coffee Day Group so far.
As per the official order released by NCLT, Skanda Legal and Tatva Legal are the two counsels representing the applicant and the respondent in this matter.
Back in January 2023, the company faced a penalty of INR 26 crore from the capital markets regulator SEBI. This fine was imposed due to the diversion of funds from subsidiaries to a company related to the promoters. SEBI’s investigation revealed that INR 3,535 crore was diverted from seven subsidiaries of Coffee Day Enterprises Ltd (CDEL) to Mysore Amalgamated Coffee Estates Ltd, an entity linked to the promoters of CDEL, as stated in its 43-page order.
The seven subsidiaries involved in this case are Coffee Day Global, Tanglin Retail Reality Developments, Tanglin Developments, Giri Vidhyuth (India) Ltd, Coffee Day Hotels and Resorts, Coffee Day Trading, and Coffee Day Econ.
The Coffee Day group was founded in 1993 through Coffee Day Global Limited. The group’s business encompasses various aspects of the coffee industry, from procurement to processing and roasting of coffee beans.
Operating cafes in more than 200 Indian cities, Coffee Day Global’s portfolio also includes Technology Parks & SEZs, Logistics, Investments, Financial Services, and Hospitality. The company began as a partnership firm under the Indian Partnership Act, 1932, and later transformed into a private limited company known as Coffee Day Holdings Company Private Limited under Part IX of the Companies Act, 1956.
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