Owner of B.C. ghost town in big legal battle
Fight in Canada against fraud allegations
It’s been a few years since Krishnan Suthanthiran last made headlines.
They appeared in a rush in 2005 when it was revealed he was the quixotic millionaire who’d bought a remote ghost town — the abandoned mining community of Kitsault, B.C., frozen in time with a library, pub, hospital, school, stores, bank, theatre, curling rink and 302 empty homes.
Attention flutters back sporadically whenever he floats a new idea for how to use Kitsault: a haven for the world’s top artists and scientists, a movie studio, a resort, a natural gas hub.
But for the last six years, Suthanthiran has also quietly been the focus of another kind of attention.
Authorities in Belgium have been investigating a series of large financial transactions involving Suthanthiran’s businesses — transactions amounting to about $14.2 million at the current exchange rate — as a possible misuse of company assets, concealing assets in insolvency and money laundering.
Suthanthiran has denied any wrongdoing, and his dogged fight to squelch the Belgian probe has been playing out in courtrooms in two Canadian provinces.
Suspicion is not the kind of attention he is used to.
Suthanthiran, 71, one of six children born to grocerystore owners in southern India, immigrated to Canada in 1969 for a mechanical engineering degree at Carleton University in Ottawa. He had just $400 when he arrived, according to a written biography from his company.
After his father died from cancer while he was a student, Suthanthiran dedicated his career to researching and treating the disease.
He abandoned plans to go to medical school when he got a job in the United States helping an oncologist with engineering projects. In 1977 he started a medical supply business and, with its tremendous success, expanded to other countries and other investments. He positions himself as a global entrepreneur and philanthropist engaged in medical, energy, entertainment and real estate.
The former mining town that made Suthanthiran’s name in Canada was built in the 1970s and 1980s to house employees of the neighbouring molybdenum mine. Despite a surge of optimism, it was abandoned just 18 months after residents moved in, when molybdenum prices cratered and the mine shut down in 1983.
In 2005 Suthanthiran bought the whole town, 1,500 kilometres north of Vancouver, for less than $7 million.
He seems stumped on viable ways to use it. Early ideas focused on ecology, education, health and peace, even a Gandhi film festival. His latest push has been to convert it into an energy terminus for shipping Albertan energy products to Asia and Latin America. In February, Suthanthiran announced a plan to make it a site to turn waste into energy, inviting municipalities, companies and governments to partner with him.
In 2008, with a boost in molybdenum prices, Avanti Mining Inc. bought the defunct mine — which was not a part of Suthanthiran’s purchase — with the intention of restarting its operation.
Avanti officials hoped Suthanthiran would rent part of the ghost town so it could once again house mine workers, but he wanted nothing to do with it and denied the mine access to his town.
Avanti contractors trying to get to a drill site were turned away; a security guard met workers collecting water samples; a bridge was blocked to detour mine workers.
The company took the ghost town to court, arguing the mine retained its right of passage through the town despite the sale. Suthanthiran argued passage was only meant to be for remediation work, not for restarting mining operations. He lost.
While the ghost town has been the public face of his interests, most of his attention is on companies entwined in a family of medical equipment firms, all with the prefix Best in their name. Collectively, Suthanthiran calls them TeamBest.
Much of his success has come from cancer diagnostic and treatment technology, including cyclotrons that produce radioactive isotopes used in radiation therapy.
In 2011, Suthanthiran bought a struggling Belgian nuclear medicine business from Nordion. As part of the deal, according to court records, Nordion was to inject 19 million euros into the new firm, called Best Medical Belgium.
Soon after Suthanthiran’s purchase, his new Belgian subsidiary conducted three large transactions — moving 9.6 million euros to other Suthanthiran companies in Canada.
Six months after Suthanthiran took over, the Belgian firm declared insolvency and authorities had questions.
An investigation was launched for possible misuse of company assets, concealing assets in insolvency, making false statements, using false documents and money laundering.
The money was allegedly moved in three transactions: a transfer in the form of a loan from his Belgium firm and purchases by the Belgian firm of two expensive cyclotrons from Best Canada that were not delivered.
Did Best Canada, the Belgians wanted to know, liquidate the sister firm’s assets and contribute to it becoming fraudulently insolvent?
Suthanthiran and his companies deny any such allegations.
In 2014, when the Belgium government turned to Canada to help its investigation through a mutual legal assistance treaty, Canada’s justice department stepped into the fray.
In September 2014, without Suthanthiran being alerted, two search warrants were authorized on his business premises, one in Ontario and one in British Columbia.
The RCMP searched Best Cyclotron Systems Inc. in Vancouver and Best Canada in Ottawa, seizing a large amount of documentation, some of it relating to the construction of cyclotrons, according to court files.
Suthanthiran tried to prevent the seized material from being sent to Belgian authorities.
He argued the material the RCMP seized contains trade secrets. He alleged a conspiracy because the Belgian government has a stake in his competitor and the investigation against him was really about gaining competitive advantage in the construction of cyclotrons.
In Ontario, his motions were roundly denied last year; Ontario appeals court judge David Watt called Suthanthiran’s idea of a conspiracy “a colourable allegation” without evidence. All the material seized in Ontario was ordered to be sent to Belgium.
In Vancouver, however, things took a different path.
In B.C. Supreme Court, the original request from Belgium was unsealed and the judge compared it to the interpretation of it by the RCMP and found the case not as clear as the officer suggested. Not all evidence pointed to the Best companies’ transactions being improper.
Justice Susan Griffin found the B.C.-based RCMP officer “seriously overstated the implications of the evidence” and “created a seriously misleading picture” of the Belgian probe.
“I find that the affidavit fell significantly short of the care and candour expected in such matters and it cannot be considered reliable,” said Griffin before setting the Vancouver search warrant aside.
Suthanthiran then took that decision and used it to take another crack at killing the search warrant in Ottawa as well.
In court, Suthanthiran’s Ontario lawyer, Scott Hutchison, argued the fresh evidence from the full text of Belgium’s request, coupled with it being the same basis for both RCMP search warrants, meant the same outcome should be expected in Ontario.
“Same book, different covers,” Hutchison described it in court.
Justice Robert Maranger didn’t agree, saying it was more like: “different authors, writing a different book using the same source material.”
Maranger deemed the Ontario RCMP officer’s warrant “not nearly as susceptible to the same criticism” and “for the most part” fairly summarized the thrust of the Belgian probe.
Last week, Maranger rejected Suthanthiran’s bid preventing the Ontario materials from being handed over to Belgian authorities, four years after his Ottawa office was raided.
Suthanthiran said his fight is not over.
“My business was confiscated in Belgium and we will deal with it appropriately and the whole warrant has no basis,” he said in an email exchange with the National Post.
“We do plan to appeal the recent Ottawa decision.”
Because of a pending appeal, it would not be appropriate to further discuss the case, he said.
He added that he has embarked on another venture that may shed light on his experience: he bought a Vancouver production company and is working on a feature film about doing business in Belgium and Canada.
“For global distribution,” he said.
WE DO PLAN TO APPEAL THE RECENT OTTAWA DECISION.