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· Investigators say many contracts were fictitious
· Arms dealer used Channel Island tax havens

David Pallister
Monday October 1, 2007
The Guardian

http://www.guardian.co.uk/kenya/story/0,,2180820,00.html

The Serious Fraud Office has begun a new investigation into British links with one of the biggest corruption inquiries in Africa. UK firms won huge contracts from the Kenyan governments of presidents Daniel arap Moi and Mwai Kibaki, but anti-corruption investigators have discovered that many were fictitious and amounted to state-sponsored looting. The SFO inquiry is concentrating on the movement of millions of pounds into accounts in the tax havens of Guernsey and Jersey controlled by Andrew MacGill, a 64-year-old arms dealer from Fife. The inquiry into the Anglo Leasing scandal was welcomed last week by the Kenyan high commissioner, Joseph Muchemi.

Documents seen by the Guardian show that financing for some of the 18 suspicious security equipment contracts at the heart of the investigation was administered through a company called Investec Trust, based in Guernsey.

Three men are now the focus of the SFO investigation. Besides Mr MacGill, they are his business partners, Rashmi Kamani and brother Deepak. Kenyan investigators believe that many of the contracts the men benefited from involved sums being paid for equipment that was either overpriced or not delivered at all. Mr MacGill agrees that his Russian wife, Ludmilla, signed the first Anglo Leasing contract. Other businessmen in Liverpool, Daventry and Cambridge played minor roles. The Kamani brothers, who once held extensive property interests in the UK, have disappeared from their Nairobi villa and are on the Kenyan police wanted list.

Kenyan ministers have repeatedly professed no knowledge about the individuals behind the Anglo Leasing network. But the Investec documents show that Mr McGill and the Kamanis have been involved in 13 of the suspect contracts, which had an overall total value of more than $700m (£343m). Mr MacGill runs a group of companies under the name LBA - short for lightweight body armour. Guardian emails to Mr MacGill, for comment on the allegations, have been replied to by a secretary, claiming he could not be contacted. In past correspondence he has insisted he acted properly, recently saying: "You need to remember this is Africa and you can't believe anything anyone says."

Investec Trust is an arm of the South African-based private banking group Investec, best known for its UK sports sponsorship. The trust handled LBA's business from 2001 through accounts with the banks HSBC in Guernsey and Standard Chartered in Jersey. Internal audits showed that no questions were asked by Investec managers about LBA's receipt of funds from Kenya or Mr MacGill's arms dealing for the Kenyan police with controversial suppliers that included a Yugoslav state company accused of supplying military aid to Saddam Hussein.

Suspicions were aroused among some Investec staff in April 2002 when a fax arrived from Rashmi Kamani, in Nairobi, requesting the transfer of $3.5m - received from the Kenyan government - to a Swiss company called Apex Finance. A file note said: "Who is RC Kamani? What authority do [sic] he have to effect payments on LBA? Who is Apex Finance Corp and what connection to LBA?" On Mr MacGill's instructions the transfer was made, followed by at least four more until February 2004. They totalled more than £15m.

But it was only after the publication in March 2004 of a report by the former anti-corruption chief, John Githongo, that executives realised the danger. The company's lawyers recommended the firm make a suspicious activity report to Guernsey's financial intelligence service.

Last week an Investec spokesman said: "We are aware of this matter and are satisfied that we have dealt with it appropriately."

Peter Neville, director general of the Guernsey financial services commission, said the island's criminal law restricted dissemination of information from disclosures to the intelligence service: "We take very seriously any evidence that a licensed finance business has been involved, even unwittingly, in untoward activities."

Akelo nyar Kager, jaluo@jaluo.com

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