Fall of high-flying billionaire Ketan Somaia as UK hands eight-year jail term for fraud

Ketan Somaia at Nairobi Law court. [Photo: File/Standard]

Ketan Somaia lived and dined like a king, globetrotted in private jets, struck deals in the skies as he popped expensive champagne and dazzled even Kenya‘s rich club with his billionaire tastes, looks and exhibitionism. But he will now face his 50s behindbars alongside some of the world's deadliest criminals.

The fall of Somaia from a high-flying and smooth-talking billionaire, who lured his pawns with luxury trips, generous gifts and fabulous parties where he only served them the luxurious Dom Perignon 1984 Champagne before swindling them, to an eight-year prison sentence alongside Britain's most dangerous criminals is as epic as it is thrilling.

On Tuesday, a judge in London handed Somaia the jail time, effectively dishonouring, punishing and caging a paper billionaire who skimmed millions of pounds from unsuspecting 'friends'. The controversial businessman was also at the centre of one of Kenya's biggest financial crimes - the Goldenberg fake gold exports compensation scandal.

As prison gates were locked in the faraway land, the story of Somaia's false billions resonated with many Kenyans who remember his jailing at Kamiti Maximum Prison for another case of fraud, something that has brought to dishonour a man hitherto perceived as a suave businessman with the correct political connections.

The footprints of his pretencto the life of billionaire playboy are to be found not just in Kenya but in India, South Africa, the United Arab Emirates and Britain. For decades, Somaia easily charmed himself into the hearts of senior politicians and wealthy businessmen wherever he went. His business connections and jet-setting lifestyle saw him sponsor the Miss World Competition twice. But he has not had time to fully enjoy his fortune, trotting from jails to courtrooms and to hospitals, before going back to jail.

Somaia, who has acquired a reputation of a 'King Con', a 'confidence trickster on a grand scale' and 'almost shameless in his exploitation' of his victims, was brought down by a private prosecution in UK. But this time round, he will be facing the walls at the high security Belmarsh prison in south east London till he is 60.

Though it is by far a better prison than most of Kenya's jails, including Kamiti, his new prison is described as the British version of America's Guantanamo Bay due to its reputation to hold 'exceptional risk category A prisoners' and it is said to have a prison within the prison for the most dangerous criminals.

Some of the inmates of Her Majesty's Prison Belmarsh where Somaia is jailed have included Al-Qaeda preacher Abu Qatada before he was deported, and fundamentalist Abu Hamza, who was extradited to the US.

The court in London found that Somaia, a former Kenya resident who moved to the UK, duped investors into handing over their money with false promises of huge profits. He lavished his would-be victims with luxury gifts, champagne and trips around the world.

Somaia gave the impression of being a successful businessman; smooth, charming, impressive and persuasive. He posed as a friend of the billionaire Hinduja brothers and claimed to own assets worth Sh42.5billion (US$500million) in banking and hotels.

He goes to jail almost a month after he was convicted of swindling wealthy investors in the UK out of Sh1.6 billion following the largest private prosecution in British legal history, after delaying his sentencing over medical reasons.

In the early stages of the investigations into the Goldenberg scandal, he was described as having struck some of the deals in the skies with businessman Kamlesh Pattni. Somaia, a Kenyan of Asian origin, ran away to London in the mid-1990s after being implicated in a five million sterling-pound (Sh439 million) scandal in which he was to supply the Kenya Police with communications equipment that he allegedly failed to deliver.

At one point, he wanted the South African Government to sell him Mpumalanga National Park to run it the way Maasai Mara National Park is managed. Somaia also owned Delphis Bank (later Bank of Credit and Commerce International (BCCI)), Block Hotels and casinos, and the United Touring Company (UTC), among others. He was at one point a partner with Pattni in Marshalls East Africa Limited.  He and Pattni joined up in eight companies then later collapsed the empire when they fell apart.

In 1994, the sworn enemies were in Kamiti Maximum Security Prison, where they would both return from time to time and also spend stints at Kenyatta National Hospital's private wings to nurse some ailments.

Somaia's health complications took him to India, even as the scandals piled up, where he ended up under arrest. In 1990, Somaia was given Sh112 million to import 500 London-look taxis but only about 200 got home. His troubles worsened in August 2004 when he was jailed for corruption.

As he shuffled between jail-rooms, his financial empire suffered, companies grew thin, and banks like BCCI just collapsed. But this did not stop him from continuing his scams until one infuriated investor, Mr Murli Mirchandani, filed UK's largest private prosecutions after he was swindled.

Between 1999 and 2000 when he was president and chief executive of the Dolphin Group of Companies, Somaia passed for a very wealthy businessman with business operations in Dubai and Africa, as well as an interest in the Delphis Bank, Mauritius.

The prosecution argued he used his wealth and status within the Indian community to persuade Mr Mirchandani (the primary complainant) to make payments of Sh1.6 billion ($19.5 million) after promising him high returns.

Mirchandani, who claims to be worth more than Sh10 billion ($120 million), pursued Somaia in the civil court before finally launching a private prosecution.

He owned an office in Mayfair and a palatial home in the exclusive North London suburb of Hadley Wood - favoured by Arsenal and Spurs footballers. Mirchandani said he was persuaded by Somaia to hand over millions of dollars in a series of 10 business transactions and loans.

"Fourteen years ago, I was a self-made businessman with a thriving business to hand over to my children. When I met Mr Somaia, I trusted him implicitly. He seemed to me to be a very successful and wealthy businessman and I thought that I could benefit from doing business with him. I now bitterly regret my misplaced trust," Mr Mirchandan said in statement after the ruling.

Mirchandani received regular interest payments but never saw the loans returned or the paperwork confirming his investments.

But even after his arrest, Somaia continued to live a luxurious lifestyle, dining at five-star hotels in Mayfair and the exclusive East India Men's Club, and sending his teenage daughter to a finishing school in Switzerland.

On June 23, he was found guilty by a 12-man jury of nine counts of obtaining money transfers by deception at London's Old Bailey criminal courts. But he moved to court in the week to his sentencing and temporarily won the court's reprieve in handing him the jail sentence after arguing that sending him to jail would infringe on his human rights.

His lawyer James Woods QC argued that Somaia needed regular dialysis treatment and his life would be risked if the normal prison entry procedures were applied to the fraudster.

Somaia asked the court to establish whether the prison is prepared to cater for his health needs before sending him to serve his sentence. But while delivering the sentence on Tuesday evening, judge Richard Hone told Somaia that he was a "fundamentally dishonest" person.

"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. There is no evidence of where the money ended up. Not one of the loans was repaid in part," said the judge.

"However, I think some allowance should be made, though in my judgment you are your own worst enemy in that respect, having failed to take medication and failed to adhere to your doctor's advice." The prison will be taking Somaia to a hospital for his dialysis sessions.