Prosecutors successfully argued that Sasikala and her mentor, former Tamil Nadu Chief Minister Jayalalithaa Jayaram, had possessed "disproportionate assets" that could not possibly have been obtained with their public salaries.
Palaniswami, a known Sasikala loyalist and a five-time MLA, is the party's strongman from Salem district and now holds the portfolios of Highways, Public Works and Minor Ports.
She had to surrender to authorities to serve a four-year jail term on Wednesday, but appointed Mr Palanaswami before she left.
All eyes are now on the Governor who is expected to announce his decision soon. Some heads might roll for registering cases of abduction, illegal confinement and wrongful restraint against chief minister Palaniswami and Sasikala based on a complaint from AIADMK Madurai south MLA S S Saravanan. Jayalalitha died in office in December, 2016, triggering a succession battle within her AIADMK party. Barring Palaniswami and Sengottaiyan, all other ministers have retained their portfolios in the new cabinet. Palaniswami will be sworn-in as chief minister at 4.30 pm in the evening.
Senior lawyer and BJP leader Subramanian Swamy, who had backed Sasikala for some time, said, "I was expecting the conviction".
In its 42-page petition, the delegation claimed Sasikala's election was violative of the party constitution as she was chosen by the general council of the party and not the primary members. The apex court "restored in toto" the judgment and the findings of the trial court in Bengaluru which held all the four accused - Jayalalithaa, Sasikala and Sasikala's two relatives V N Sudhakaran and Elavarasi guilty and sent them to jail.
Not just Jayalalithaa, he is believed to be an unwavering loyalist of Sasikala too.
"We should all get together and prevent the party from going into the hands of one family", said Panneerselvam, who had rebelled against Sasikala on 7 February, claiming that he was forced to resign from the chief minister's post in order to pave way for Sasikala.
The development resulted in full-fledged celebration in the Koovathur resort where the Sasikala camp was housed for over a week. Police presence has been stepped up at the resort. Apparently, Sasikala who appeared in the political field following the suspicious death of Jayalalithaa is eager to take revenge on both Jayalalithaa and CM Panneer Selvam, whom the former picked to be the acting CM instead of Sasikala. With Pannerselvam's exit from the fold, the party may well be headed for a split unless a leader emerges who can keep the two camps together.