CHENNAI: Serial entrepreneur C Sivasankaran, who made audacious bets in telecom, has been given a second chance by a court which annulled his bankruptcy on Monday.
Sivasankaran had applied for bankruptcy protection in a Seychelles court to ward off a claim by his Bahrain-based telecom partner Batelco, which won a court decree for its $212-million claim on its investment in S Tel, for which Sivasankaran stood personal guarantee. S Tel’s telecom licences in India were cancelled along with 121 other licences by the Supreme Court in the 2G case.
Siva, as he is referred to in business circles, was declared bankrupt on the August 26, 2014. But Monday’s ruling by the Seychelles Supreme Court has enabled him to come out of bankruptcy.
Siva, who sold Aircel to Maxis, bought and sold Barista coffee chain and stakes in Tamilnad Mercantile Bank, besides a host of other deals, could not be reached for a comment.
The dispute stems from the contract between Batelco and S Tel, which was awarded a 2G mobile licence in January 2008. In 2009, Batelco subscribed to acquire 42.7% of S Tel for $174 million. Following this, S Tel became a joint venture between Batelco (as a minority partner) and Siva (as majority partner). As part of the joint venture, Siva stood personal guarantee for the proposed investment by Batelco.
Once the Supreme Court cancelled the 2G licences on the February 2, 2012, Batelco enforced the personal guarantee given by Siva in a London court and obtained a court decree, which ordered Siva to pay nearly $212 million. Batelco immediately enforced the London court’s judgment in Seychelles, (where Siva holds a passport). He was declared ‘bankrupt’ on August 26, 2014. Siva made a Post-Bankruptcy Composition Offer on August 6, 2015, in accordance with the insolvency act of that country, which was approved by all the creditors except Batelco. He offered nearly $30 million (to Batelco), which includes nearly $10 million worth Tata Tele Services shares and $20 million in cash.
On Monday, the court dismissed all the challenges and allegations of Batelco as ‘purely speculative statements and without any evidential support whatsoever’ and ruled that the Post Bankruptcy Composition Offer was ‘reasonable, fair and proportionate in the circumstances of the bankrupt’s finances”.
The Supreme Court of Seychelles cancelled the bankruptcy order made against Siva in August 2014 and directed for all his assets all over the world to be freed, so that the assets can be utilized to pay the creditors.
