Coffee Day Global, the operator of Cafe Coffee Day chain, has found itself in troubled waters as it faced corporate insolvency last week.
The coffee giant's financial woes came to light after IndusInd Bank filed a petition with the National Company Law Tribunal (NCLT), leading to the company's bankruptcy process, according to a report by Economic Times.
The Bengaluru Bench of the bankruptcy court directed Coffee Day Global for corporate insolvency after negotiations between the company and IndusInd Bank fell through, as revealed by ET
An official order issued by NCLT stated that Skanda Legal and Tatva Legal are representing the applicant and respondent in the case.
Earlier this year, in January 2023, Coffee Day Global was slapped with a hefty fine of ₹26 crore by the Securities and Exchange Board of India (SEBI).
Also Read: Bain Capital Set to Obtain 90% Stake in Adani Capital and Adani Housing
The penalty was imposed due to the company's alleged diversion of funds from its subsidiaries to a company affiliated with its promoters.
SEBI's investigation found that a staggering sum of ₹3,535 crore had been diverted from seven subsidiaries of Coffee Day Enterprises Ltd (CDEL) to Mysore Amalgamated Coffee Estates Ltd, a company linked to CDEL's promoters.
The Coffee Day group, which was established in 1993 through Coffee Day Global Limited, has a diverse business portfolio spanning various aspects of the coffee industry, including procurement, processing, and roasting of coffee beans.