How high-flying billionaire Ketan Somaia conned UK investor
Somaia was found guilty of falsely representing the extent of his personal wealth and that of his companies; that his intention was to use the sum advanced to purchase shares in the Delphis Bank Mauritius.
To get the first transfer, he also lied that any appreciation in the value of the investment in purchasing shares in Delphis Bank Mauritius would be paid to Mr Mirchandani, in addition to the interest payable.
On or about June 25, 1999, he dishonestly obtained another money transfer in the sum of US$7.5 million by deception from the same victim.
He was convicted of falsely representing that a true valuation of the Delphis Bank Mauritius was US$75 million; that the investment of US$7.5 million would be used to purchase a 10 per cent stake in the Delphis Bank Mauritius and that he would issue shares in the name of Mirchandani and prepare the necessary paperwork shortly after June 25, 1999.
Somaia, between the 15th day of August 1999 and the 16th day of September 1999, dishonestly obtained money transfers worth US$2,775,000, lying that the funds would be applied towards the purchase of a 50 per cent interest in the Diamond Mining Corporation of Liberia.
He also lied that he believed the Diamond Mining Corporation’s value would treble within six to nine months.
Further, between September 29, 1999 and October 22, 1999, he dishonestly obtained US$3 million by deception, by falsely representing that the total investment from Mirchandani of US$3 million would be combined with US$3 million of his own, and the total used to purchase a bank in Tanzania.
He also lied that he intended to sell such bank to companies controlled by him with a guaranteed profit of 20 per cent and that the loan would be repaid within 120 days with interest at 15 per cent per annum paid monthly (US$37,500 per month).
He also dishonestly obtained US$1,850,000 by falsely representing that the value of Block Hotels was US$3.7million; and that the funds advanced would be used to acquire for Mr Mirchandani a 50 per cent interest in Block Hotels.
Somaia received US$1,500,000 also by deception, by falsely representing that he intended to use the funds to purchase shares in the Delphis Bank Mauritius; that the shares purchased in the Delphis Bank Mauritius would, when issued, be provided as collateral for the loan; and that a return at a total rate of 18 per cent per annum would be paid during the period of the loan.
In March 2000, he received another US$1 million by deception, saying the loan would be repaid within 30 days and that the repayment of the loan was personally guaranteed by him. In May 2000, Somaia obtained another US$1 million by deception, saying that all of the outstanding obligations of Ketan Somaia to Murli Mirchandani would be repaid by mid-September 2000; and that an interest of US$67,500 per month would be paid.
Lastly, in August 2000, he managed to get another US$200,000 also by deception, when he said he would use the funds to purchase shares in the Delphis Bank Mauritius. He further said the loan would be repaid on or before the 90th day from August 10, 2000, and that an interest would be paid at a minimum rate of 25 per cent per annum.
He said that a share certificate no 1822 would provide a security for the loan. After failing on all these promises, Mirchandani decided to go to court.
Mirchandani filed 11 charges of fraud, but two were dropped by the jury and Somaia was found guilty of the remaining nine counts.