Five indicted over Goldenberg graft scandal

Five people, including four former senior civil servants, have been indicted by Kenya's attorney general on fraud charges in connection with a financial scandal in which millions of dollars were siphoned off the state treasury in the early 1990s.

Those to be charged with conspiracy to defraud and conspiracy to commit a felony include former director of intelligence James Kanyotu; former governor of the central bank Eric Kotut and his deputy, Eliphaz Riungu; and former permanent secretary in the finance ministry Wilfred Koinange, Attorney General Amos Wako said on Wednesday.

The former civil servants would also face additional charges of abuse of office and breach of trust against the public, he said.

The fifth suspect on the conspiracy charges is Kamlesh Pattni, who has been described as the mastermind of the Goldenberg affair, a name taken from Goldenberg International, a company founded by Pattni through which the money was siphoned.

The initial indictments relate to 5.8 billion Kenyan shillings (US $80 million), but Wako said investigations were still underway. "The investigations and compilation of investigation files into other aspects of the Goldenberg affair are still continuing and as and when they are completed and the files submitted to me, appropriate decision would be made without delay," Wako said in a statement.

Goldenberg International Ltd allegedly colluded with government officials to claim money from the central bank for the fictitious export of gold and diamonds that reportedly came into Kenya from other countries. Kenya itself produces little gold and no diamonds.

The scandal occurred after the former Kenyan government set up an export compensation scheme, which involved paying incentives to Goldenberg to promote exports and so encourage foreign exchange earnings. Kenya was at the time experiencing shortages of foreign exchange partly because most donors had withheld funding over concerns of high-level corruption.

The current government, led by President Mwai Kibaki, is itself embroiled in another corruption scandal, the so-called Anglo-Leasing affair, through which attempts were made to award government contracts to non-existent firms. Two cabinet ministers resigned last month after they were named in the scam.