E-Clips:- Business Pictorial - Family Behind Secret Defence Deals

One of the biggest defence and security contractors in Kenya is a family which has been sporadically in the news over the past 10 years in connection with controversial projects.

The family, said to enjoy the patronage of senior figures in the previous government, appears to have strong links with the current one as well. Investigations have thrown up links to the E-cop project, the tamper-proof passports, forensic laboratory, vehicles for the Office of the President, among a host of others, totalling billions of shillings in value. The Kamani family, with a declared net worth of Sh1.2 billion is one of the wealthiest and most private in Kenya today.

Although Mr Chamanlal Kamani, the 74-year-old patriach of the Kamani clan, is known to have enjoyed close links with the Moi regime, very little is on public record about him. In a declaration to the Securities and Exchange Board of India in 2003, Mr Kamani declared his wealth as Sh96,280,200. His elder and richer son, Rashmi C Kamani, 53, gave his fortune as Sh792,314,000 and the younger and better known son, Deepak C Kamani, aged 51, as Sh373,596,000.

They all gave their address as House No. 81, Kyuna Road, Nairobi, and said their office was at Post Box No.49615, Industrial Area, Nairobi. Yet the family has businesses strung around the world. They are in hotels, flower farms, infrastructure, telecommunications, project financing, real estate, cotton, as well as Diani Reef Beach Resort in Mombasa and Radisson Whitesands Resort in Goa, India, according to Wikipedia, an online encyclopaedia.

They have invested particularly heavily in India, including a chain of 10 luxury business hotels. They have also invested in Dubai, primarily in Business Towers, according to Wikipedia. Their businesses in India go back to 1984 and perhaps beyond, when their Rajath Finance Ltd was registered, but is after 1997 that the pace of investment seems to have picked up.

Their flagship company, Unicorn Holdings, was registered in 1998 and they bought out the public shareholding in 2003. The Kamanis are setting up a university in India to offer hotel and hospitality industry training. Through Unicorn, they are reported by an industry magazine to be investing Sh1.6 billion in the academy, to be in Goa and will offer a three-year degree course.

The Kamani familys most substantial deal, however, seems to be a tie-up with Carlson Hospitality Worldwide, the parent company of Radisson Hotels & Resorts, in Radisson Whitesands Resort, Goa. Radisson Hotels & Resorts and its parent Carlson Hospitality Worldwide include over 776 hotels and resorts and six cruise ships, according to a statement issued by the company. Carlson said Radisson Whitesands Resort Goa is just the first venture and the hotel chain announced that together they planned to launch other properties across India in the next five years – the next after Goa being the Laguna Kumarakom Resort in Kerala.

A press release by the hotel group described Unicorn Group Holdings as "a multinational company based in the UK and Kenya with interests in trading, finance, computer software, telecommunications and hospitality". The statement added: "Unicorn is driven by the vision of its chairman, C V Kamani, an entrepreneur from Rajkot, who made his fortune in Kenya. The company affairs are directed by the board comprising Rashmi and Deepak Kamani, Parag Mody and H M Pai".

One website reports that the family has been linked to a slate of scandals including Anglo Leasing, the supply of allegedly overpriced Mahindra jeeps to the Kenya police, and the sale of dysfunctional radar equipment to the Kenyan air traffic control. Ms Sundha Ruparrel, Deepaks sister, was a director of a company at the address given by Anglo Leasing in its passports contract. Her husband, who died a couple of years ago, was a director of Hallmark International which supplied the Mahindra jeeps to the police.

The elder son Rashmi and Priscilla Rashmi Kamani, were among directors of a company which in 2000 occupied an address in London which Anglo Leasing gave as its office in the forensic contract. And the Kamanis gave Infotalent Systems Private Ltd as one of their companies in their application to buy the public out of Rajath Finance in 2003.

It is Deepak Kamani, however, that anti-corruption detectives have shown an interest in during their investigations into Anglo Leasing. Before the Anglo Leasing scandal broke, Deepak would have passed for just another ordinary self-effacing medium-built fifty-something city businessman.

In the pre-Anglo Leasing days, Mr Kamani normally enjoyed his early morning workouts at the Maisha gymnasium at Nairobis Serena Hotel. In the luxury leisure sports centre frequented by the who-is-who in the city, Mr Kamani would cordially but rather shyly mingle and exchange niceties with a couple of fellow members before embarking on his treadmill exercise.

After an hour or so of exercise, Mr Kamani would get into his Mercedes Benz and be driven to his offices in a deceptively nondescript looking building on Dar es Salaam Road in Nairobis Industrial Area near Mater Hospital. The red brick building has no name and could easily pass for just another go-down or store.

But as the saying goes, looks can be very deceptive. The building, according to those familiar with it, housed some of the best offices in the city where multi-million dollar deals were clinched. Only for important meetings would Mr Kamani venture to the familys more flamboyant offices –Kamsons Centre – on Mombasa Road. Clearly, Mr Kamani must have loved the anonymity that enabled him to pass off for just another businessman despite being a multi-millionaire who wined and dined with the high and mighty of the countrys political establishment.

But things suddenly changed for Mr Kamani when his name was connected with the Anglo Leasing scandal and he, together with other suspects, was made to record statements with the police. With that kind of negative publicity, it was only understandable that Mr Kamani – a naturally reticent person, according to those who know him – would retreat from the Maisha.

Although the Kamani family has been in business in this country for decades, little is known about them. Like most family businesses, what they do, how they do it and how much they make are all closely guarded family secrets.

The little available information shows that the close-knit family lives in a mansion in the exclusive and leafy Kyuna estate. The Kamanis include the patriarch – Mr Chamanlala Vrajlal Kamani as well as brothers and sisters Rashmikant Chamanlal Kamani, Chamanlal Vrajlal Kamani, Sudha Chamanlal Kamani and Deepak Kamani. Besides the Anglo Leasing business deal that went haywire, the family has been involved in a number of other highly lucrative security projects in the country using the familys flagship company, Kamsons Ltd.

According to records at the Registrar of Companies, Kamsons was registered in 1975 and issued with certificate of registration number 13747. Going by the latest filed returns at the company registry in Sheria House, the directors of Kamsons are Rashmikant Chamanlal Kamani, Deepak Chamanlal Kamani, Chamanlal Vrajlal Kamani, Surendra P. Joshi and Sudha Chamanlal Kamani.

According to the filed returns, at the time, all the directors held 1,250 shares except for Sudha who is listed as a non-shareholder director. The family was for many years running a low key business of supplying posho mills from an unremarkable factory-cum-office block on Lusaka Road until late 1980s when they made a breakthrough after being introduced to the cloistered but highly profitable security supplies business.

The master in the business of procuring for the countrys national security apparatus at the time was Mr Ketan Somaia. Mr Somaia used to work very closely with the Internal Security chief, the late Hezekiah Oyugi, then the countrys second most powerful person after President Moi.

When Mr Somaia realised the need to shift base from Kenya to Dubai in the early 1990s following Mr Oyugis death, the Kamanis were already becoming well schooled in the line of security procurement. They had been introduced to Mr Oyugis successor at the Office of the President, Mr Wilfred Kimalat, and seemed to get on fairly well. It was during Mr Kimalats tenure as Internal Security chief that a firm closely linked to Kamsons was contracted to supply boilers for the Prisons Department. The multi-million boilers deal has been the subject of a running inquiry by the Controller and Auditor General because after being paid, the company supplied boilers that were either second hand or unserviceasble.

When Mr Kimalat was removed from office and Mr Zakayo Cheruiyot appointed in his place, fortunes for the Kamanis did not change much. The Kamanis moved swiftly to get acquainted to the new Internal Security chief and soon, Mr Deepak Kamani, the most aggressive business-wise of the brothers had become a regular visitor to Mr Cheruiyots office at Harambee House. Towards the end of the 1990s the Kamanis were so well wired that they are said to have had a hotline at their palatial Kyuna residence linking them directly to a State House operative during the Moi regime.

But even with such connections, there were some politicians and civil servants in the Moi regime who did not get along with the Kamanis. For instance, Mr Chris Okemo was said to be have been averse to kow-towing to them when he served as Finance minister. Sources close to the former minister say that he blamed his removal from Treasury to his differences with such big-league players.

It is now evident that working through an elaborate network of top level civil servants, senior security officers and with tacit backing from State House operatives during the Moi years, companies closely associated with the Kamani family made billions of shillings from Government contracts between 1994 and 1998 alone. The lucrative deals were all concentrated within the ambit of national security under which Government contracts are not subject to normal public tender regulations.

Fresh evidence provides a clear anatomy of how these deals were conceived, how the contracts were varied from the original contract sums, how the agreements played in favour of the suppliers and which bank accounts the monies were remitted, besides other confidential details.

The deals revolve around Hampden Investments Ltd of Gibraltar, LBA Systems Ltd of Scotland, Apex Finance Corporation of Geneva, Switzerland, and Sound Day Corporation of the UK. One such deal started as a US $24.9million (Sh 1.9billion) contract in October 1997 and its scope involved supply and installation of a dedicated digital telecommunications security network for the Prisons Department.

The project was conceived and money was paid out barely two months before the 1997 General Election, giving the impression, as one knowledgeable source intimated, that this was an election campaign fundraising project. Just like the passports deal, all the projects under scrutiny here have similarities in terms of project conception, the secretive nature of the projects under the cloak of security procurement, the involvement of dubious foreign-registered corporations and the ubiquitous requirement for a three per cent "arrangement and management fee" to be paid in advance.

The Prisons Department contract was signed on October 30, 1997 with Mr Musalia Mudavadi, then Minister for Finance and his permanent secretary, Mr Simeon Lesrima, representing the Government on one hand, and a representative of LBA Systems Ltd., a company whose registered offices were said to be Stathairly, Upper Largo, Scotland. The contract stipulated that the payments must be made on or before mid-December 1997. The money was promptly paid to Midlands Bank account number 0016009029 through Bankers Trust of New York.

Bearing in mind that this was an election year and Kanu had a knack for coming up with ingenious and often phantom projects through which money would schemed out to oil the then ruling partys election campaign machinery, it was not surprising that payments for this particular project were worked out in to coincide with the critical campaign time. The 1997 General Elections was held at the end of December.

Over five years since the prisons telecommunications project was supposedly installed and commissioned, the prisons department still relies on its ancient analogue communications system.

Then there was the mother of all deals; the Mahindra police jeep saga where the Government paid hundreds of millions of shillings to buy supposedly quality cars for the police and ended up with a cross-breed between a tortoise and a snail for a chase car.