The assignment was earlier given to global audit firm EY. But it has now been reassigned owing to ‘certain conflict of interest’, the Bengaluru-based company said.
Coffee Day Enterprises has roped in former DIG of Central Bureau of Investigation Ashok Kumar Malhotra to investigate the contents of the letter allegedly written by its late founder V G Siddhartha and scrutinise its books of accounts.
This assignment was earlier given to global audit firm EY. But it has now been reassigned owing to ‘certain conflict of interest’, the Bengaluru-based company said.
“It has been ascertained by the board in discussions with EY that it has certain conflict of interest to carry out the referred assignment, since they are rendering services in the area of taxation, software and have also carried out due diligence of the company or subsidiaries, on behalf of third party clients,” the company said in an exchange filing.
The conglomerate with interests in coffee to IT services said Malhotra would be assisted by Agastya Legal, New Delhi, led by its senior partner M R Venkatesh.
“Malhotra has handled several high-profile cases ranging from investigations involving bank, securities related cases of Harshad Mehta and other matters. He has also been assisting the Supreme Court in several matters,” the company added.
Coffee Day Group founder chairman V G Siddhartha was found dead on July 31, a day after he had gone missing under mysterious circumstances. At the same time, a purported letter written by Siddhartha had surfaced alleging harassment by the income tax department.
The letter also indicated about existence of certain financial transactions beyond the knowledge of the company board, auditors and even close family members.
Given the nature of allegations, the company on its August 8 board meet had assigned EY to conduct a forensic audit of its books of accounts and investigate the circumstances leading to such claims mentioned in the letter.
This week, the company received regulatory nod for extending its annual general meeting (AGM) by 45 days. It has already informed the stock exchanges regarding delay in announcement of its quarterly results.
The company had also appealed its lenders and creditors to give it sufficient time to honour its repayment obligations.
Putting its debt liability at Rs 4,970 crore, the company has asserted that its deleveraging efforts would ensure timely repayment to creditors.
Especially, its move to divest the Global Village Tech Park is likely to reduce the group’s total debt significantly to around Rs 2,400 crore, it had said.
Currently, private equity major Blackstone is doing the due diligence for buying out the tech park at a valuation ranging from Rs 2,600 crore to Rs 3,000 crore.