April 25, 2013


Goldenberg scandal – the end of a sorry saga? This sorry episode in Kenya’s history has now got a conclusive finding. Is this the end of it?

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Goldenberg scandal – the end of a sorry saga?

Goldenberg scandal – the end of a sorry saga?

The decision by Justice Joseph Mutava to quash charges against Mr Kamlesh Pattni arising from allegations of his involvement in the infamous ‘Goldenberg Scandal’ is understandable from a constitutional viewpoint but even so if this is to be the end of all legal proceedings in the case it also brings to an end a very sorry saga.

Goldenberg: the biggest scam in Kenyan history?

In 1993, the Goldenberg scandal came to light when the Kenyan government was found to have subsidised exports of gold by paying a company, Goldenberg International Ltd (GIL), 35 percent more than the foreign currency earnings supposedly derived from the sale of gold abroad. So a guaranteed profit and an even healthier profit given that many of the transactions were found to be fictitious.

The Bosire Commission: billions lost

A Commission of Inquiry into the scandal, headed by Mr Justice Bosire, was set up in 2003. In nearly two years of investigation the Bosire Commission called 102 witnesses to testify, received representations from 55 advocates and considered 188 exhibits. The Hansard record of the Commission’s deliberations ran to over 18,000 pages and the Commission’s final report ran to some 418 pages.

Estimates vary but the scheme that began in 1991 is said to have cost Kenya the equivalent of more than 10 percent of its annual Gross Domestic Product. The Commission of Inquiry reported its findings in October 2005 stating that Sh158.3 billion [$2.1 billion] of Goldenberg money had been transacted through 487 companies and individuals. The ‘Bosire Report’ concluded that what was in its own words ‘merely a minimum of what the country lost through the Goldenberg scam’, came to a total of Sh27,079,578,684, that is over 27 billion shillings.

There was also a loss of over three billion shillings through ‘pre-export financing’ and it further estimated that more than 10 billion shillings had been ‘transferred abroad and not returned’. The latter, the report stated, ‘gives a good idea of the scale of what Goldenberg and Pattni were able to salt away. [The Kenya Forum must stress that this was the allegation in the words of the Commission’s report but that Mr Pattni has always denied any wrongdoing].

The Bosire lists

Justice Bosire

The Bosire Commission listed those whose specific roles could not be established but ‘recommend that, at the discretion of the Attorney General, further investigations be undertaken against them to determine their respective roles, if any, in the whole scam, and whether they were in any way, involved doing.

Those falling in that category include:

  1. a) E. Daniel Arap Moi
  2. b) Joseph Magari
  3. c) Joshua Kulei
  4. d)Multiphasic Co. Ltd

The Commission also listed all those who in our view were in one way or another, responsible for those acts and omission for the attention of the Hon. Attorney General for any possible criminal or civil action.’

These included:

(a) Mr. Kamlesh Mansukhlal Pattni

(b) Mr. James Kanyotu

(c) Hon. Prof. George Saitoti

(d) Mr. Charles Mbindyo

(e) Dr Wilfred Karuga Koinange

(f) Mr. Collins Owayo

(g) Mr. Arthur Ndegwa

(h) Mr. Eric Kotut

(i) Mr. Francis Chelelgo Cheruiyot

(j) Mr. Elphas Riungu

(k) Mr. Elijah Arap Bii

(l) Mr. Tom Kilalya Werunga

(m) Mr. Michael Wanjihia

(n) Mr. Job K. Kilach

Prosecutions dismissed

The Kenya police, the Report noted, had ‘commenced investigations’ but these and the ‘consequent prosecutions were selective’.

The Law Society of Kenya (LSK) also launched a private prosecution against Eric Kotut, Charles Mbindyo, Collins Owayo, Dr Wildfred Koinange, Francis Cheruiyot and Kamlesh Pattni but the then Attorney-General Amos Wako ‘moved swiftly to join himself in the prosecution’ (the Bosire Report’s wording) and objected to it on the grounds that he was to undertake his own prosecution. The private prosecution was dismissed.

Raila Odinga then took out his own private prosecution against Saitoti, Koinange, Pattni, Mbindyo and others. Yet again the Attorney-General terminated the prosecution.

Criminal cases not concluded

That left nine criminal cases prosecuted through the Attorney-General’s office beginning in 1994 against Pattni, Riungu, Wanjohi and later Kilach, Wanjiha, and later still, Mbindyo and Koinange. These prosecutions however, according to the Bosire Report, proceeded in a ‘most haphazard and lethargic fashion’ in a ‘pointless merry-go-round resulting in serious delay’. It was not until 1998 that the hearing of only one case commenced: and not one of them was ever concluded.

Justice delayed and denied

“Justice delayed is justice denied” the old maxim has it. This is a principle that that is enshrined Kenya’s new constitution and, on that basis, 14 years after proceedings against Mr Pattni commenced, Justice Mutava’s ruling is constitutionally correct on the grounds that his rights had been violated because the case had dragged on so long. But it should not have done so.

Delayed justice denying justice, however, also applies to those who have been wronged and seek redress. In the case of the Goldenberg scandal the wronged people are the people of Kenya. There is talk of appeals being lodged but it seems likely that there will be no redress for Kenyan taxpayers 20 years after the Goldenberg scandal was first exposed.


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