Coffee Day Enterprises Limited has secured temporary relief from the Karnataka High Court in a Foreign Exchange Management Act (FEMA) case, with proceedings by the Enforcement Directorate (ED) deferred until February 23, 2026. The company disclosed this development to stock exchanges on January 22, 2026, following a news report about the court's decision.

Case Background and ED Notice

The company received a notice from the Enforcement Directorate concerning a Foreign Direct Investment (FDI) transaction undertaken in 2010. The notice pertains to alleged contraventions under the applicable provisions of the Foreign Exchange Management Act, 1999, and the rules and regulations framed thereunder as applicable at the relevant time.

Court Proceedings and Relief

After examining the matter and receiving legal advice that it had acted in compliance with applicable laws, Coffee Day Enterprises challenged the ED notice before the Karnataka High Court. On January 21, 2026, the court provided significant relief by deferring the ED proceedings under FEMA until the next hearing date.

Company's Position and Impact Assessment

The company maintains its position that it has acted in full compliance with applicable laws during the 2010 FDI transaction. Coffee Day Enterprises emphasized that the matter is currently sub judice and the company is actively contesting the allegations. Importantly, the company stated that at this stage, there is no impact on its financials, operations, or other business activities.

The company also confirmed it is not aware of any undisclosed information that could explain recent trading movements in its stock, ensuring transparency with market participants and regulatory authorities.

Regulatory Compliance and Disclosure

The disclosure was made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in response to a news report published in the Economic Times on January 21, 2026. The company's proactive communication demonstrates its commitment to keeping stakeholders informed about material developments that could affect investor sentiment or trading activity.

Coffee Day Enterprises CEO Malavika Hegde has received temporary relief from the Karnataka High Court, which has stayed Prevention of Money Laundering Act (PMLA) proceedings against her. The stay order comes in response to a show cause notice that had been issued by the authorities.

Court Intervention Details

The Karnataka High Court's decision to stay the PMLA proceedings represents a significant judicial intervention in the ongoing case. The stay specifically addresses proceedings that were initiated following the issuance of a show cause notice to Hegde in her capacity as CEO of the coffee retail chain.

Legal Relief for Coffee Day Leadership

This court order provides temporary protection to Malavika Hegde from the money laundering investigation proceedings. The stay order will remain in effect until further judicial review or until the court decides on the substantive matters related to the case.

Impact on Coffee Day Enterprises

The judicial stay offers respite to the company's leadership during ongoing legal proceedings. As CEO of Coffee Day Enterprises, Hegde's legal status directly impacts the operational and strategic direction of the Cafe Coffee Day brand and its associated business operations.