Politics and policy
Kenya-born businessman Ketan Somaia has been jailed by a UK court for conning a wealthy investor of Sh2 billion. File
By BDAfrica.com reporter
In Summary
- His rise from obscurity was made possible by his political ties to the Kanu regime and the UK Tory party.
- The Kroll Report into Moi-era corruption identifies him as a bagman for then PS Hezekiah Oyugi.
- Adjusted for inflation, amounts Somaia obtained in disputed circumstances total up to about Sh7 billion.
Convicted fraudster Ketan Somaia
spent years on the run from angry creditors whose millions of dollars
he used to prop up his troubled Dolphin Group.
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His rise from obscurity as a Kenyan
timber-merchant to the global stage was made possible by his political
connections; first to big names in the kleptocratic Kanu regime under
President Daniel arap Moi, then to Tory (Conservative Party) politicians
in the United Kingdom that he met through Mark Thatcher, son to former
British Prime Minister Margaret Thatcher.
The Kroll Associates report
into Moi-era corruption identifies him as a bagman for Mr Hezekiah
Oyugi, then a powerful permanent secretary in the Office of the
President and quotes an unnamed source as saying he enriched himself as a
middleman in arms sales and other government contracts.
Among his close business partners he counted
controversial figures such as Goldenberg architect Kamlesh Pattni and
disgraced Trust Bank boss Ajay Shah.
His cousin and business associate, Pankaj Somaia, is named in the Kroll Report as the right hand to a State House powerbroker.
The smooth-talking businessman
quickly amassed a large number of legitimate businesses. By the
mid-1990s, his empire stretched from Kenya and India to the United
Kingdom and South Africa. It included hotels, banks, casinos, a sugar
miller, a motor dealership, as well as TV, radio and print media.
But the fast-living mogul soon ran into trouble in the late 1990s.
His Bermuda-registered group,
run from Dubai, collapsed in 2001 after Indian entertainment tycoon
Subash Chandra of Asia TV had the Kenyan-born wheeler-dealer declared
bankrupt in London. Somaia was then pursued in court on three continents
for more than a decade, arrested at least twice and jailed once, even
as he continued to live large and do business around the world.
His personal assistant, Arifa Parkar, had to leave his employ The Guardian newspaper
once reported, “exhausted by fielding calls from unpaid creditors”,
after he failed to pay her wages. He fought off the bankruptcy
declaration and was even leading a deal to buy the United Kingdom’s
largest Asian radio stations when his fraud conviction came down last
month after a private prosecution brought by a former friend.
Here is a compilation of some
of the allegations that have dogged the 52-year-old businessman, now
incarcerated at London’s high-security Belmarsh prison:
- 1990: Obtained Sh112 million (then $5 million) from the Government of Kenya to import 500 ‘London-look’ black taxi cabs but only delivered 200 secondhand vehicles. Arrested in 2004 and jailed at Kamiti Maximum Security Prison. He spent much of his sentence at the private wing of Kenyatta National Hospital until his conviction was quashed in 2005 and he was released.
- Mid-1990s: Obtained $8 million (then Sh375 million) from the Government of Kenya to supply the Kenya Police with communications equipment, but allegedly failed to deliver. Fled to London to avoid arrest after refusing to appear before Parliament on four separate occasions to explain himself.
- 1990s: Obtained Sh238 million (about $5 million at 1995 rates) in a deal with American hotel chain Starwood Hotels & Resorts Worldwide. Starwood sued Somaia in a London court to recover the money but faced an uphill battle trying to enforce a judgment in Kenya handing over the Somaia-controlled Block hotel properties.
- 1997: Received around $2 million (then Sh130 million) from his Dubai-based business partner Surajit Sen and failed to repay the money. No charges brought.
- 2001: Obtained $15 million (then Sh1.2 billion) from a businessman referred to in court as ‘Mr Bose’. Allegedly only paid back $2 million by handing over a house in Dubai that had been pledged as security. No charges yet.
- 1999/2000: Obtained nearly $20 million (Sh1.5 billion) from Mr Murli Mirchandani, a friend, and $200,000 from Mr Dilip Shah, an in-law, as loans or investments. Somaia purported to sell stakes in Delphis Bank (Mauritius and Tanzania), the Diamond Mining Corporation of Liberia and other ventures. Paid Mr Shah a paltry $7,000 through his accountant years later. Convicted on nine counts of fraud and jailed for eight years this month after a private prosecution begun by Mr Mirchandani in 2011.
- 2002: Arrested by Hertfordshire police for allegedly taking £500,000 (then $768,000) from a local entrepreneur. Released on bail, he fled to Kenya where he received protection as the Crown Prosecution Service unsuccessfully sought his extradition. He was arrested at a wedding in India in 2008 and extradited to the UK but the case was dropped because the money had been repaid.
Adjusted for inflation, the amounts detailed above total up to about $80 million in today's money or Sh6.9 billion.
“Securing a conviction against Mr
Somaia will not undo the harm he has caused and the pain he has
inflicted upon me and my family,” Mr Mirchandani said in a recent
statement to the media. “But knowing that he has been brought to justice
helps bring us some closure.”
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