'Conflict of interest' kept EY from probing Coffee King’s last letter

Agencies
September 5, 2019

Bengaluru, Sept 5: It was "conflict of interest" that led global audit firm Ernst & Young to recuse itself from investigating the letter that Cafe Coffee Day owner V.G. Siddhartha purportedly wrote to the company's Board.

However, EY has not been the external auditor of the company.

"Vide our letter dated August 8, 2019, it was informed that Board of Directors in their meeting dated August 8, 2019 had appointed Ernst and Young to investigate the circumstances leading to statements made in the purported letter of the former Chairman late V.G.Siddhartha dated July 27, 2019 and to scrutinise the books of accounts of the company and its subsidiaries," Coffee Day Enterprises said in a regulatory filing on August 30.

"Subsequently, it has been ascertained by the board in discussions with E&Y that the said firm has certain conflict of interest to carry out the above 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."

CCD then had to seek former CBI official Ashok Kumar Malhotra's aid to investigate the letter.

The letter was purportedly written by CCD owner Siddhartha to the company's board on July 27, two days before he went missing and was then found dead on July 31.

On August 30, Cafe Coffee Day in a regulatory filing said that Malhotra will investigate the letter.

New Delhi-based Agastya Legal LLP will assist Malhotra in the investigation into the contents of the two-page letter found in Siddhartha's office in the city on July 30 when a search was conducted to find out if he left any suicide note.

Siddhartha, 60, is alleged to have committed suicide on July 29 night by jumping off the road bridge into the Netravathi river, as his body was found on its banks on July 31 morning.

In the signed letter, Siddhartha claims to be solely responsible for all the mistakes he apparently committed.

"I am solely responsible for all mistakes. Every financial transaction is my responsibility. My team, auditors and senior management are totally unaware of all my transactions. The law should hold me, and only me accountable, as I have withheld this information from everybody including my family," the letter, which was found in Siddhartha's table drawer, said.

The state police is investigating the case to ascertain what drove Siddhartha to commit suicide, and a forensic audit of his personal accounts and company books will reveal the mistakes he claims to have made and the transactions his team, auditors and senior management were unaware of.

The Income Tax department, which was inspecting his office and personal accounts for compliances, claimed Siddhartha's signature in the letter was not the same as in his annual reports, though the company's board confirmed that it was authentic.

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News Network
September 25,2024

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In a significant development, a special court tasked with handling cases against Members of Parliament and Members of Legislative Assemblies (MP/MLAs) has ordered that a First Information Report (FIR) be filed regarding the Muda case.

Additionally, the Karnataka Lokayukta, which is an anti-corruption body, has been tasked with investigating allegations against Siddaramaiah, who is reportedly involved in the case.

The court instructed the Lokayukta (an anti-corruption authority) to provide a report within three months. It also ordered the relevant authorities to file a First Information Report (FIR) regarding the case.

Judge Santhosh Gajanan Bhat issued the directive, compelling the Mysuru Lokayukta police to commence an investigation following a formal complaint lodged by Snehamayi Krishna. 

The Karnataka Lokayukta in Mysuru is required to carry out the investigation under Section 156 (3) of the Criminal Procedure Code, which mandates the registration of a First Information Report (FIR).

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News Network
October 3,2024

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Bengaluru: The Karnataka Food Safety and Quality Department has issued an urgent warning following the discovery of potentially cancer-causing chemicals in cakes sold by certain bakeries across the state.

Recent tests conducted by the department revealed that some cake samples, particularly those with vibrant colors, contain harmful synthetic coloring agents such as Allura Red, a substance known to pose health risks. The findings have raised concerns about the use of artificial colors in bakery products, especially given their potential link to cancer and other serious health conditions.

"We routinely test various food products, and this time, our officials noticed unusually dark-colored cakes on the market," said Srinivas K, Commissioner of Food Safety for Karnataka. "Upon testing, we found that a few cakes contained Allura Red, a synthetic dye associated with health risks."

The use of artificial colors, especially in popular cakes like red velvet and pineapple varieties, is widespread as it attracts customers, particularly children. However, many bakers prefer using natural, safer alternatives, while some opt for synthetic dyes to enhance the cake's visual appeal.

"Most bakeries use permissible, natural colors that are safe for consumption. Unfortunately, a few are resorting to synthetic dyes just to make their cakes more attractive," said a bakery owner from Electronic City, speaking anonymously.

Medical experts are warning that consuming synthetic colors can lead to numerous health issues, including asthma and allergic reactions.

"Some of these artificial dyes are carcinogenic, and prolonged exposure could have serious consequences, especially for children and young adults," cautioned Dr. Vandana G, a private medical practitioner.

While the Food Safety and Standards Authority of India (FSSAI) confirms that only a limited number of samples tested positive for harmful colors, legal action is being taken against the violators.

"There is no need for widespread panic or halting production. We are closely monitoring the situation, and only a few bakeries were found to be non-compliant. Rest assured, appropriate legal measures are underway," assured an FSSAI official. 

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News Network
October 1,2024

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Mysuru, Oct 1: The Karnataka Lokayukta team on Tuesday arrived at the disputed plot in Mysuru and began investigation into the MUDA case against CM Siddaramaiah and his wife, news agency ANI reported. Snehamayi Krishna, the complainant in the case was also present with the team.

Sources stated that ED sleuths might issue a notice to CM Siddaramaiah at any time and issue summons to him for questioning. The sleuths are also keenly watching the movements of CM Siddaramaiah’s close associates and relatives, including a cabinet minister in connection with the MUDA scam.

Sources further said that there is a possibility of the ED conducting raids across the state on offices and residences of close associates of CM Siddaramaiah. The ED has also gathered information on bank accounts and financial transactions of CM Siddaramaiah and his associates.

The Directorate of Enforcement (ED) on Monday registered an Enforcement Case Information Report (ECIR), equivalent to an FIR by the police, against CM Siddaramaiah over the alleged irregularities in the allotment of 14 sites to his wife Parvathi B.M. by the Mysore Urban Development Authority. The ED registered the case taking cognisance of the FIR registered against the Chief Minister by the Lokayukta police on September 27.

Meanwhile, the Karnataka Lokayukta probing the MUDA case has also expedited the probe. The sleuths led by Mysuru Lokayukta SP T.J. Udesh have visited the controversial land on the outskirts of Mysuru city. The petitioner, Snehamayi Krishna, also accompanied the team.

The move of Chief Minister Siddaramaiah’s wife to return 14 sites allotted by the MUDA to her has triggered a debate. BJP MLA from Mysuru T.S. Srivatsa stated on Tuesday that the move of CM’s wife is not acceptable. "The two commissioners who colluded in the MUDA scam are roaming freely even today," he said.

"CM Siddaramaiah first claimed that there was no scam at all. Later, he formed a commission and now there is an FIR against him. After committing the mistake, you offer to return the sale deed. The time is up. He will have to tender his resignation and I am sure he won’t be in the position until Dasara festivities," MLA T.S. Srivatsa stated.

T.J. Abraham, one of the petitioners in the MUDA case said, “I had demanded the MUDA commissioner to take back the allotted sites. He had written back saying the process would be initiated. They were waiting for the investigation report."

"CM Siddaramaiah has not approached the division bench or the Supreme Court to challenge the order against him because there is nothing to be challenged. Returning sites is not a big sacrifice. The Chief Minister has lost it," Abraham stated. 
 

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