Billionaire linked to the collapse of a Tanzanian bank jailed for 8 years

Jailed billionaire Ketan Somaia supposedly wooed his victims with champagne parties, extravagant dinners and trips on private Lear jets to Dubai, Kenya and South Africa. PHOTO | AFP 

In Tanzania, those who worked in the banking sector in 1990s will know Ketan Somaia as an investor with Delphis Bank Tanzania Limited which dramatically collapsed in 2003. London court jailed the billionaire for defrauding a friend and other investors of some £13.5 million (about Sh37.8 billion) that they had put into his struggling Dolphin Group 15 years ago.

Dar es Salaam/Nairobi. Notorious businessman Ketan Somaia, who was behind the collapse of Delphis Bank in Tanzania, has been jailed for eight years in the UK, according to news reports. Somaia was sentenced by a London court for defrauding a friend and other investors of some £13.5 million (about Sh37.8 billion) that they had put into his struggling Dolphin Group 15 years ago. In Tanzania, those who worked in the banking sector in 1990s will know him as an investor with Delphis Bank Tanzania Limited which dramatically collapsed in 2003.
The Bank of Tanzania (BoT) finally put the struggling Delphis Bank under its administration in March 2003. BoT then accused Somaia and co-shareholders of failure to inject adequate capital in the bank to cover heavy losses.” The London court found the billionaire guilty of fleecing investors, convicting him of nine counts of obtaining money by deception, according to a story carried by the Daily Mail online.
The court heard how he wooed his victims with luxury trips and champagne parties at his palatial home and exclusive restaurants.
“I am satisfied the money you took as loans and investments were never invested as you said they would be, but were used by you either for your own purposes or to prop up your failing companies,” said Judge Richard Hone.

“You were fundamentally dishonest in your dealings.”
Somaia was described as persuasive, using his charm to get at clients’ cash to prop up what the court heard were failing businesses. Defence lawyer James Woods had argued that Somaia’s heart and kidney problems have reduced his survival chances to only 20 per cent in the next five years.

When Delphis Bank (Tanzania) Limited was shut down in 2003, the 52-year- old Kenya-born businessman got into a spot of trouble with local regulators. Tanzanian authorities demanded that Somaia be extradited from Kenya to face charges over monies owed to the collapsed bank. Tanzanian businessman Vincent Laswai, currently a director at Kibo Palace Hotel in Arusha, will also remember Somaia as the man who reportedly swindled him of some $248,000 (Sh396.8 million) in 2000.

According to a dossier from the US Treasury Department over a week ago, Delphis Bank may have around the same time of its collapse entered into an unclear business relationship with the now troubled FBME Bank.

FBME established itself in Tanzania round the same time after shifting its operations from the Cayman Islands due to problems with capital adequacy regulations. The US has now linked FBME to money laundering, leading to forceful takeover of its key operations by authorities in Cyprus.  
To date, at least 10 per cent of Delphis Bank customers and those of Greenland Bank which also collapsed over a decade ago, but not associated with Somaia, are yet to collect their money from the BoT. The BoT legal officer Rashid Mrutu, told The Citizen earlier this year that some customers are yet to show up to collect their money kept by the central bank’s Depository Insurance Board (DIB).