A private firm of V. G. Siddhartha (VGS), entrepreneur and founder of Coffee Day Enterprises Ltd. (CDEL), owed ₹2,693 crore more to CDEL’s subsidiaries as on July 31, 2019, according to a report released on Friday.

According to the consolidated audited financial statements, Mysore Amalgamated Coffee Estates (MACEL) owed ₹842 crore to the subsidiaries as on March 31, 2019.

The probe began a month after the entrepreneur disappeared in July last year.

“We understand that a significant portion of the money may have been probably spent to ‘buy back’ equity from PE investors, repay loans and pay interest apart from funding certain other private investments which are outside the scope of this investigation,” it was mentioned in the report.

The investigation was conducted by ex-DIG of CBI, Ashok Kumar Malhotra.

"We are broadly agreeable to the statements made by VGS that he failed to create the right profitable business model despite his best efforts as it created largely out of high-cost borrowings and PE investments carrying a high rate of returns,” it further said.

As per the summary of the report available on stock exchanges, the investigating team was not provided with any documentary evidence to draw an inference that there may have been any harassment from the Income-Tax Department. “Nevertheless, a perusal of the financial records during the relevant period suggests a serious liquidity crunch which may have have been arisen due to the attachment of Mindtree shares by the I-T department.”

The investigating team was also of the opinion that the interactions, mail exchanges and one-to-one discussions it had with management personnel and other officers of the company and its subsidiaries were ‘not suggestive’ of any existing information to draw a positive inference that VGS’ team and senior management were cognitive of the manner in which certain transactions were carried out.

Therefore, the investigating team said, it was inclined to believe the statement contained in the note of VGS dated July 27, 2019 which read: “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.”