Ketan Somaia jailed for eight years in the UK for fraud

Ketan Somaia in this file photo. Somaia was on July 23, 2014, jailed for eight years in the UK. PHOTO | FILE

What you need to know:

  • Mr Somaia was convicted of conning two businessmen out of loans in 1999 and 2000 in what was described as the largest private prosecution in Britain.
  • Daily Mail quoted Judge Richard Hone describing Mr Somaia as “fundamentally dishonest” in his dealings with the two investors named as Murli Mirchandani and Dilip Shah.

Ketan Somaia, one of the people who featured in the Goldenberg corruption scandal that helped wreck Kenya's economy in the 1990s, was on Wednesday jailed for eight years in the UK.

A UK court found the 52-year-old fugitive guilty of swindling investors of £13.5 million (approximately Sh2 billion), British tabloid Daily Mail reported.

Mr Somaia was convicted of conning two businessmen out of loans in 1999 and 2000 in what was described as the largest private prosecution in Britain.

The court heard that Mr Somaia never invested the money or repaid it, but instead used it for his own purposes or to save his ailing business empire.

It further heard that Mr Somaia had exhibited similar dishonest behaviour towards a third investor and tried to evade justice until he was brought to account in a British court.

Last month, a jury found Mr Somaia guilty of nine counts of obtaining money transfers through deceit in 1999 and 2000. He was cleared of a further two counts.

'FUNDAMENTALLY DISHONEST'

The tabloid quoted Judge Richard Hone describing Mr Somaia as “fundamentally dishonest” in his dealings with the two investors, named as Murli Mirchandani and Dilip Shah.

“It is apparent your Dolphin group of companies was in serious trouble in the economic downturn of 1999,” the judge was quoted saying.

“Loans you took were never invested, as you said they would be, they were used by you for your own purposes or to prop up your business.

“Not one of the loans was repaid in part. Not one single deal came to fruition.”

According to the report, Mr Somaia wooed his victims with champagne parties, extravagant dinners and expense-paid trips on private Learjets to Dubai, Kenya and South Africa.

Dubbed "King Con," he boasted about ties to the billionaire Hinduja brothers while showing off a plush office in Mayfair and a palatial home in the exclusive north London suburb of Hadley Wood.

“In reality, Somaia was shamelessly exploiting his unwitting victims to get his hands on their money to sustain his luxurious lifestyle and prop up his failing businesses,” the paper reported.

Although the evidence heard by the jury was “very strong,” Mr Somaia still contested the case, he added.

The judge said that in deciding the sentence he had taken account of Mr Somaia’s heart condition but said his medical needs could be accommodated in jail.

Mr Mirchandani, who was the main complainant in the case, could not attend court for Mr Somaia's sentencing because of his own ill health, the tabloid reported.

COLLAPSE OF DELPHIS BANK

Mr Somaia is best remembered for his role in the Goldenberg scandal by presiding over the collapse of Delphis Bank, one of the financial institutions linked to the multi-billion-shilling scandal.

The scam centred around a company called Goldenberg International, which claimed to be selling Kenyan gold and diamonds to companies abroad.

To encourage exports, the government at the time paid Goldenberg bonuses for foreign sales even though Kenya has no diamond deposits and produces only a tiny amount of gold. Subsequent inquiries found its exports were fictitious.

However, large payments associated with the scam were said to have passed through Mr Somaia’s Delphis Bank.

Proceeds from the scam were used for foreign currency speculation, which sent the Kenyan shilling into free fall and national inflation soaring.

He was jailed for the alleged scam in 2004, but his conviction was quashed the following year.

He subsequently fled to the UK more than a decade ago.