A cloud has lifted for Chennai-born transnational businessman Chinnakannan Sivasankaran after the Supreme Court of Seychelles on Monday cancelled an August 2014 order declaring him bankrupt and directed all his assets around the world be freed.
The Court also gave its stamp of approval for a Post-Bankruptcy Composition Offer that Sivasankaran had made before it to pay off his creditors.
“The terms of the proposed composition… are reasonable, fair and proportionate in the circumstances of the financial status of the bankrupt,” Justice D Karunakaran observed in his ruling.
The ruling sets the tone for Sivasankaran to emerge from a dark chapter that came as a result of the Indian Supreme Court’s cancellation of 2G mobile licences to 11 companies in 2012.
One of the companies to lose its licences was S Tel Pvt Ltd, a joint venture between Bahrain Telecommunications Company (Batelco) and the Siva Group, the $3-billion conglomerate he headed. Known as a serial entrepreneur, Sivasankaran made his fortune from buying stakes in companies and exiting with handsome profits.
The cancellation of S Tel’s 2G licences had the effect of undoing a contract between BMIC, a wholly-owned subsidiary of Batelco, and S Tel.
Under this, BMIC was to acquire a 42.7 per cent stake in S Tel for which Sivasankaran had offered a “personal guarantee” before a commercial court in London.
BMIC enforced this in 2012, following the cancellation of licences.
In June 2014, a London court ordered Sivasankaran to pay over $211.2 million to BMIC and issued a worldwide “freezing order” to attach all of his assets.
Weighed by the financial burden imposed by the London court order, Sivasankaran, a citizen of Seychelles, petitioned the country’s Supreme Court for a bankruptcy order.
In August 2014, the court declared him bankrupt, and appointed a receiver to manage Sivasankaran’s estate and investigate his financial affairs.
After holding meetings with Sivasankaran and his creditors, the court-appointed receiver sought approval for a Post-Bankruptcy Composition Offer made by Sivasankaran and accepted by a majority of his creditors.
However, BMIC contended that it was not bound by the Composition Offer.
In his order on Monday, Justice Karunakaran noted that “the Court is satisfied with the terms of the proposed Composition” and rejected BMIC’s objection in its entirety.
The Court further cancelled the 2014 declaration of bankruptcy order against Sivasankaran and affixed its stamp of approval on the withdrawal of foreign proceedings against him.