Ketan Somaia nicknamed “King Con” is a Kenyan fraudster who was convicted in the United Kingdom (UK) for defrauding several creditors millions of dollars through his company Dolphin Group.
Somaia first made headlines in the 1990s for his involvement in one of Kenya’s largest ever scandals where billions of shillings were looted.
According to UK tabloid Daily Mail, the fraudster was sentenced to eight years in jail in July 2014 for swindling about £13.5 million (then approximately Ksh2 billion) from investors. In what was described as the largest private prosecution in Britain, he is said to have conned two businessmen, Murli Mirchandani and Dilip Shah, between 1999 and 2000.
The court was told that the businessman did not invest the loans or repay them, rather, he enriched himself with the money. The court also heard that Somaia had previously been accused of the same but had evaded arrest until his date with the UK court.
He was found guilty of guilty of nine counts of obtaining money by false pretence in 1999 and in 2000. He was cleared of two other charges.
“It is apparent your Dolphin group of companies was in serious trouble in the economic downturn of 1999.
“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,” the judge was quoted by Daily Mail as saying.
According to media reports, Somaia boasted of having high profile contacts in various parts of the world and used them to lure investors. He is said to have treated them to expensive dinners and flights to Kenya, Dubai – UAE, and South Africa.
He told his victims that he had connections to the billionaire Hinduja brothers. He boasted a posh 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,” Daily Mail reported.
According to Business Daily, Somaia in 1990 was contracted by the Kenyan government to import 500 ‘London-look’ black taxi cabs worth Ksh112 million (then $5 million) but only delivered 200 secondhand vehicles.
Kenya Police Comms Equipment
In the mid-1990s, Somaia obtained Ksh375 million (then $8 million) from the Kenyan government for the supply of communication equipment to the National Police Service (NPS).
After allegedly failing to deliver, he skipped four separate summons by parliament to explain himself and fled to London to evade arrest.
In the mid 1990s, Somai was sued by American hotel chain Starwood Hotels & Resorts Worldwide after he allegedly swindled them Ksh238 million (about $5 million at 1995 rates). Starwood moved to a London court in a bid to recover their money but were met with challenges trying to get a judgement enforced in Kenya to have the businessman hand over his hotel properties to them.
Swindled business partners
In 1997, Somaia obtained a loan of about $2 million (then Ksh130 million) from his Dubai-based business partner Surajit Sen but failed to repay the money. However, no charges were brought against him.
According to Business Daily, he again in 2001 received a $15 million (then Ksh1.2 billion) loan from a businessman referred to in court as ‘Mr Bose’. and only refunded $2 million in the form of a house in Dubai which had been placed as collateral. No charges were brought against him.
In 1999 and 2001, he received nearly $20 million (Ksh1.5 billion) from Mirchandani, and $200,000 from Dilip Shah, an in-law, as loans or investments. He allegedly claimed to sell his stakes in Delphis Bank (Mauritius and Tanzania), the Diamond Mining Corporation of Liberia.
Somaia is said to have paid Shah only $7,000 out of the $200,000 through his accountant years later.
Mirchandani sued him in 2011 and he was convicted in July 2014 and served 8 years in prison.
In 2002, he was arrested by Hertfordshire police for allegedly taking £500,000 from a UK businessman. He was released on bail and fled to Kenya where 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.
Somaia is said to have overseen the collapse of Delphis Bank which was one of the financial institutions linked to the multi-billion scandal that nearly crippled Kenya’s economy. The scandal revolved around a company called Goldenberg International, which purported to sell Kenyan gold and diamonds to investors abroad.
To boost exports, the Kenyan government paid bonuses to Goldenberg for foreign sales. This is despite Kenya not having any diamond deposits and only small bits of gold deposits. Further reports revealed that the exports were fictitious.
Large sums of the payments in the scandal are said to have passed through Delphis Bank.
Proceeds from the scam were used for foreign currency speculation, which sent the Kenyan shilling into free fall and national inflation soaring.
The fraudster was arrested by authorities in 2004 and sentenced to the Kamiti Maximum Security Prison. However, he was held at the Kenyatta National Hospital (KNH) private wing for a majority of his sentence until his release in 2005.