V G Siddhartha, the owner of Vaitarna Holdings Private Inc (VPHI), which controls local forest concessions amounting to 737,814 hectares, is currently facing a tax evasion investigation in India.
According to a Times of India report, from last Thursday to Sunday, India’s Income Tax Department conducted raids on just over two dozen properties belonging to Siddartha across the country, including in Bengaluru, Hassan, Chikkamagaluru, Chennai and Mumbai.
Siddhartha, who is the owner of India’s largest coffee chain Cafe Coffee Day (CCD), the report said, also admitted to concealing Rs 650 Crore, equivalent to just under US$100 million, in income.
“The detection of undisclosed income is expected to be much higher since there are a number of other issues, including violations of other statutes on which there is no disclosure, but relevant evidence has been found. These will be pursued effectively with vigour, energy and imagination,” the Income Tax Department is quoted as saying in a statement on the raids.
VHPI is a subsidiary of CCD.
CCD, through its Dark Forest subsidiary, in 2010 acquired the State Forest Exploratory Permit for 391,853 hectares of forest originally awarded in 2007 to US-based Simon and Shock International Logging Incorporated (SSILI), after buying out SSILI. Subsequently, Dark Forest acquired the 345,961 hectares concession which was originally assigned to Caribbean Resources Limited (CRL).
The company had been harvesting and exporting logs.
Siddhartha had said in 2012 that a processing centre for logs would be set up here but the main facility would be in India. There had been concern about the company’s failure to fulfill promised value-added production but up to last year, the Ministry of Natural Resources said it was satisfied that VHPI had started “value added initiatives.” It had also said that the company was looking to ramp up lumber production.