For Over three years, Kamlesh Pattni exploited Kenya’s export compensation scheme. He siphoned over $600 million (Sh78 billion) from taxpayers. His actions drained the Treasury and fueled a looting network.
Pattni came from a gold-dealing family in Mombasa. He began with a small jewelry business, Manorama Ltd, on Dubois Road, Nairobi. His ambition led him to establish Goldenberg International Ltd and Exchange Bank Ltd. These companies became central to the Goldenberg scandal.
Pattni studied Finance Minister George Saitoti’s 1990 budget speech. The speech proposed an Export Compensation Scheme to promote mineral re-exports. Pattni used fake export documents to claim compensation for non-existent gold and diamonds.
He did not act alone. James Kanyotu, Kenya’s Special Branch head, became a director in Pattni’s businesses. Kanyotu’s influence gave the ventures legitimacy. With connections to State House, Pattni secured a 35% compensation rate. This rate, far above the legal 20%, was hidden under “customs refunds.”
Pattni manipulated the system. He deposited locally sourced hard currency into First American Bank to also claim export compensation. The Central Bank of Kenya (CBK) noticed irregularities but failed to act. Pattni’s monopoly on gold and diamond exports promised $50 million in foreign earnings but worsened the country’s economic troubles.
The Justice Bosire-led inquiry later revealed the scandal. However, the damage to Kenya’s economy and institutions was already done. The Goldenberg scandal remains a lesson on the dangers of unchecked corruption.
