Recent that controversial businessman Kamlesh Pattni is being blamed for the virtual collapse of the gold mining industry in Zimbabwe brings back memories of what transpired in the country in the early 1990s when he staged a similar brought scheme that nearly brought the economy to its knees.
The scheme, which came to be known as the Goldenberg Scandal, came about after Pattni pushed for subsidies for exports of gold far beyond standard arrangements during the 1990s.
His company Goldenberg International was paid 35% more (in Kenyan shillings) than their foreign currency earnings. Although the scheme was designed as if it would help the country earn hard currency for the country following an aid freeze by international lenders such as the IMF, it ended up costing the country dearly and nearly brought the economy to its knees.
Conservative estimates put the cost to the county at more than 10% of annual Gross Domestic Product. It is possible that no or minimal amounts of gold were actually exported.
The scandal and associated matters was to see Pattni and other key figures dragged through the courts as well as the Bosire Commission of Inquiry. However, in April 2013, he was acquitted by the High Court.
A total of Ksh 59 million, including Sh5.8 billion that president Moi directly ordered the Central Bank to pay Goldenberg International.