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Ontario court filings claim Sayan Navaratnam, pictured, took possession of an $11-million mansion in Markham, Ont., from Shajiraj Nadarajalingam.Photo illustration by The Globe and Mail

The former chief executive and largest shareholder of Facedrive Inc. is accused of participating in a fraudulent real estate transaction so that a business associate can evade creditors, according to two lawsuits.

Ontario court filings claim Sayan Navaratnam took possession of an $11-million mansion in Markham, Ont., from Shajiraj Nadarajalingam, a real estate developer who also goes by the name Shaji Nada, in an attempt to put the sizable asset out of reach of a number of individuals claiming they were defrauded by Mr. Nada. The lawsuits claim Mr. Navaratnam did not actually pay the $11-million officially recorded in transfer documents.

Mr. Nada allegedly still lives with his family in the custom 22,000-square-foot luxury home, which features an indoor pool, theatre, basketball court, golf simulator and wine cellar. Mr. Navaratnam took possession in August, 2020, along with a $7-million mortgage, while Mr. Nada pays rent to him. “This is one of the conventionally recognized badges of fraud,” according to the statements of claim.

None of the allegations have been tested in court.

The plaintiffs in both suits are seeking a declaration that the transfer was a fraudulent conveyance, along with the sale of the property, so that any proceeds can be used as compensation.

“That might be the only real leverage we have,” said Arnie Herschorn, a partner with Minden Gross LLP who represents the plaintiffs, referring to efforts to seize the property.

A lawyer for Mr. Nada denied the allegations. “It is our client’s position that proper consideration was paid and that there was no fraudulent conveyance,” said Judy Hamilton, principal at Friedman Law Professional Corp.

Neither Mr. Navaratnam nor his lawyer responded to requests for comment.

Mr. Navaratnam previously served as CEO and chair of Facedrive, an obscure, money-losing technology company that suddenly ballooned to a valuation of more than $5-billion on the TSX Venture Exchange in 2021.

The company has since rebranded as Steer Technologies Inc. and operates a ride-sharing app, a food delivery service and an electric vehicle subscription business. Its meteoric rise on the stock market was partly fuelled by paid promotion, including articles on a website called that portrayed Mr. Navaratnam as a visionary shaping the future of transportation, alongside Elon Musk.

The company also secured a $2.5-million grant from the Ontario government to produce a COVID-19 contact-tracing bracelet. The government said the device would be manufactured locally, but The Globe and Mail later reported that Facedrive bought completed hardware from China.

Mr. Navaratnam stepped down in August, 2021, and remains the largest shareholder, with a stake of more than 20 per cent. Shares now trade for less than a dollar, crashing 99 per cent from a peak in February, 2021.

Mr. Nada, meanwhile, has a number of business interests with Mr. Navaratnam. One of Mr. Nada’s companies invested in Facedrive, according to its website, and the two men are co-founders of Malarr Entertainment, which produces immersive movies, concerts and other events.

Mr. Nada also runs a real estate development business under the umbrella of the Ideal Group. On his LinkedIn profile, he has said the company “unites people and entrepreneurial ideas to create opportunities for upbringing of masses and betterment of the world.”

But trouble has dogged Ideal for years.

The plaintiffs in the two lawsuits, Ngoc Que Anh Truong, Karim Elemam and Laila Ahmed, say they purchased preconstruction homes to be built by Ideal in Mississauga, and paid a total of $750,000 in deposits. In September, 2021, Ontario’s Home Construction Regulatory Authority refused to renew the licence of an Ideal subsidiary, and the company then told buyers that it could no longer complete the housing project.

The plaintiffs say they repeatedly asked for their deposits back, but Ideal never returned the money. Instead, they allege Mr. Nada wrongfully used the funds to shore up the troubled finances of other Ideal subsidiaries, and to finance his “extravagant lifestyle,” which includes owning a Lamborghini Aventador.

Mr. Nada had already shown a “pattern” in which his companies would take deposits from purchasers but fail to complete projects, according to the claims. Court records show Mr. Nada and his companies have been named as defendants in more than 30 lawsuits in Ontario since 2012.

In his statements of defence, Mr. Nada called the allegations against him “frivolous, vexatious and an abuse of the court’s process.”

The plaintiffs initially sued Mr. Nada and his companies in 2021, but filed amended statements of claim last month, naming Mr. Navaratnam as a defendant and adding the fraudulent conveyance allegations.

Mr. Herschorn, on behalf of the plaintiffs, spoke to a lawyer for Mr. Navaratnam last year and asked for any evidence that would prove the real estate purchase was bona fide, but never heard back, according to court filings.

It’s not the first time the fraudulent conveyance allegation has been made against the two men. Last year, two of Mr. Nada’s creditors made identical claims. Real estate agent Wing-Fu Hui and accountant Arumugavadivel Sivakumaran together lent hundreds of thousands of dollars to Mr. Nada and Ideal, but filed lawsuits in 2020 seeking repayment.

Each obtained court judgments the following year ordering Mr. Nada to pay a total of $547,280. Aside from one payment of $50,000 to Mr. Sivakumaran, the rest was left outstanding, according to court documents.

They sued Mr. Nada again last year, along with Mr. Navaratnam, seeking to force the sale of the Markham home. The lawsuit claimed Mr. Nada transferred ownership of the property shortly after the two lenders initially sued him. The matter has been resolved out of court.

Mr. Nada, meanwhile, is appealing numerous charges that Ontario’s home construction regulator laid against an Ideal subsidiary in 2021 for allegedly selling homes without a licence. A spokesperson for Mr. Nada told The Globe and Mail at the time that Ideal had made a mistake but “never intended to break any rules.”

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