Quixotic owner of B.C. ghost town in legal battle over Belgian investigation into allegations of company fraud

It is a few years ago that Krishnan Suthanthiran made headlines for the last time.

They appeared in a rapids in 2005 when it was revealed that he was the quixotic millionaire who had bought a remote ghost town – the abandoned mining community of Kitsault, BC, frozen in time with a library, cafe, hospital, school, shops, bank, theater , curling alley and 302 empty houses.

Attention falls sporadically when he has a new idea for the use of Kitsault: a refuge for the world's best artists and scientists, a film studio, a resort, a natural gas hub.

But in the past six years Suthanthiran has also quietly received the attention of a different kind of attention.

Authorities in Belgium have investigated a series of large financial transactions involving Suthanthiran's companies – transactions valued at approximately $ 14.2 million at the current exchange rate – as possible misuse of corporate assets that hide assets in insolvency and money laundering.

Suthanthiran has denied any mistake, and his persistent struggle to suppress the Belgian probe has played in courtrooms in two Canadian provinces.

Suspicion is not the kind of attention he is used to.

The northern B.C. ghost town of Kitsault, B.C.

Kitsault Resort Ltd / HO

Suthanthiran, 71, one of six children born by owners of a supermarket in South India, emigrated to Canada in 1969 for a degree in mechanical engineering at Carleton University in Ottawa. He had only $ 400 when he arrived, according to a written biography of his company.

After his father died of cancer while he was a student, Suthanthiran dedicated his career to researching and treating the disease. He stopped planning to go to medical school when he got a job in the United States from an oncologist with technical projects. In 1977 he started a medical supply company and, with his enormous success, expanded to other countries and other investments. He positions himself as a global entrepreneur and philanthropist who deals with medical, energy, entertainment and real estate.

The former mining town that made the name Suthanthiran in Canada was built in the 70s and 80s to accommodate workers from the neighboring molybdenum mine. Despite a wave of optimism, it was left only 18 months after the residents settled, when molybdenum prices creaked and the mine was closed in 1983.

In 2005, Suthanthiran bought the entire city, 1,500 kilometers north of Vancouver, for less than $ 7 million.

He seems to be stuck with viable ways to use it. Early ideas focused on ecology, education, health and peace, even a Gandhi film festival. His last push was to turn it into an energy terminal for sending Albertan energy products to Asia and Latin America. In February, Suthanthiran announced a plan to turn it into a site for converting waste into energy and inviting municipalities, businesses and governments to work with him.

In 2008, with an increase in molybdenum prices, Avanti Mining Inc. bought the defunct mine – which was not part of the purchase of Suthanthiran – with the intention of restarting the operation. Civil servants of Avanti hoped that Suthanthiran would rent part of the ghost town so that it could again accommodate miners, but he did not want anything to do with it, and denied mine access to his city. Avanti contractors who were trying to come to a drilling site were rejected; a security guard met workers who collected water samples; a bridge was blocked to divert miners.

Krishnan Suthanthiran, of the northern BC ghost town of Kitsault, has plans to make the city a medical, eco and entertainment center.

Kitsault Resort Ltd / HO

The company brought the ghost town to court and claimed that the mine had retained its right to transit through the city despite the sale. Suthanthiran argued that passage was only intended for repairs, not for restarting mining activities. He lost.

Although the ghost town is the public face of its interests, most attention goes to companies that are interwoven in a family of medical equipment companies, all with the prefix Best on their name. Suthanthiran collectively calls them TeamBest.

Much of his success comes from cancer diagnostic and treatment technology, including cyclotrons that produce radioactive isotopes that are used in radiation therapy.

In 2011, Suthanthiran bought a struggling Belgian nuclear medicine company from Nordion. As part of the deal, Nordion would inject € 19 million into the new company according to court documents, called Best Medical Belgium.

Shortly after the purchase of Suthanthiran, his new Belgian subsidiary carried out three major transactions: moving 9 million euros to other Suthanthiran companies in Canada.

Six months after Suthanthiran took over, the Belgian company declared insolvent and asked the authorities. An investigation has been initiated into possible misuse of company assets, hiding assets in insolvency, making false statements, the use of false documents and money laundering.

The money was allegedly moved in three transactions: a transfer in the form of a loan from its Belgian company and purchases by the Belgian company of two expensive cyclotrons (used to make radioactive isotopes) from Best Canada that were not delivered.

Did Best Canada, the Belgians want to know, liquidated the sister company's assets and contributed to fraudulent insolvency?

Suthanthiran and his companies deny such accusations.

Krishnan Suthanthiran, president of Kitsault Resort Ltd at his office in Vancouver, BC, October 24, 2008.

Lyle Stafford for national mail

In 2014, when the Belgian government turned to Canada to help its investigation through a mutual legal assistance treaty, the court of Canada stepped into battle.

In September 2014, two search warrants were permitted on his premises, one in Ontario and one in British Columbia, without permission from Suthanthiran.

The RCMP was looking for Best Cyclotron Systems Inc. in Vancouver and Best Canada in Ottawa and took up a large amount of documentation, part of which related to the construction of cyclotrons, according to court records.

Suthanthiran tried to prevent the seized material from being sent to the Belgian authorities.

He argued that the material that the RCMP occupied contained trade secrets. He claimed a conspiracy because the Belgian government has a stake in its competitor and the investigation against him was actually about gaining a competitive advantage in the construction of cyclotrons.

In Ontario, his motions were rejected outright last year; Ontario Apple Judge David Watt called Suthanthiran's idea of ​​a conspiracy "a wasteful accusation" without evidence. All the material seized in Ontario had to be sent to Belgium.

In Vancouver, however, things went differently.

In B.C. The Supreme Court, the original request from Belgium was not closed and the judge compared it with its interpretation by the RCMP and did not find the case as clear as the officer suggested. Not all data indicated that the transactions of the Best Companies were not correct.

Judge Susan Griffin found that the BC official based on the B.R. "seriously exaggerated the implications of the evidence" and "created a serious misleading picture" of the Belgian probe.

"I think the statement is far below the care and frankness expected in such cases and it can not be considered reliable," said Griffin before setting aside the Vancouver search warrant.

Suthanthiran then took that decision and used it to crack again when killing the search warrant in Ottawa.

Before the court, Suthanthiran & # 39; s Ontario lawyer Scott Hutchison argued that the new evidence from the full text of Belgium's request, combined with the same reason for both RCMP search warrants, meant the same result in Ontario.

& # 39; The same book, different covers & # 39 ;, Hutchison described it in court.

My company was confiscated in Belgium and we will handle it appropriately and the entire warrant has no basis

Judge Robert Maranger disagreed and said it was more like: "different authors, writing another book with the same source material."

Maranger considered the warrant issued by the RCMP officer of Ontario "not as susceptible to the same criticism" as "for the most part" freely the thrust of the Belgian probe.

Last week, Maranger rejected Suthanthiran's bid to prevent the transfer of material from Ontario to the Belgian authorities four years after his office was attacked in Ottawa.

Suthanthiran said his fight is not over yet.

"My company was confiscated in Belgium and we will handle it appropriately and the entire warrant has no basis," he said in an e-mail exchange with the National Post.

"We intend to appeal against Ottawa's recent decision."

Because of a pending appeal, it would not be appropriate to discuss the matter further, he said.

He added that he started another company that could clarify his experience: he bought a Vancouver production company and worked on a feature film about doing business in Belgium and Canada.

"For global distribution," he said.

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