Cafe Coffee Day owned DAFFCO shuts operations in Chikkamagaluru

Dark Forest Furniture Company (DAFFCO), owned by Cafe Coffee Day has closed its factory operations in Chikkamagaluru, Karnataka. In the closure notice, the company cited "acute financial constraints" and the death of CCD owner and promoter  VG Siddhartha as reasons for shutting down the wood processing factory. "On the demise of the founder and promoter, the other existing management team made efforts to revive the unit. However, it is to be noted that the company was simultaneously going through acute financial constraints and also lack of orders," DAFFCO said in the notice.

It said, "Hence, we regret to inform all the employees that business/manufacturing/all activities at the factory in Chikkamagaluru remain closed with effect from Nov 25, 2019." The company further said that all workmen at the factory have been terminated with effect from November 25 and their "payable will be paid in due course subject to availability of funds".

"As workmen are aware that the company is going through extreme financial difficulties the compensation payable will be paid in due course subject to availability of funds," the notice read. 

CCD owner's death

In July this year, Siddartha was found dead after drowning in a river in the Netravati river in Dakshina Kannada district of Karnataka after 36 hours of intense search. A purported letter written by him to his employees indicated that mounting financial debt, pressure from banks and tax authorities, and mistakes in business dealings drove him to end his life.

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Siddhartha found himself in trouble in September 2017 when the Income Tax (I-T) department conducted raids at over 20 locations linked to him. Siddhartha reportedly had been witnessing rising debts, especially in the last few years. His Coffee Day Enterprises Ltd had seen net loss widening to Rs 67.71 crore in the fiscal year ended March 31, 2018, from Rs 22.28 crore loss in the previous year. This despite revenues climbing 59 per cent to Rs 122.32 crore. 

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