The trials of Cecil Parkinson

Feb. 15 2002 1:30 PM

The trials of Cecil Parkinson

His big benefactor in trouble.

Former two-time Tory Party chairman Lord Parkinson has made a bad start to the year. First Flora Keays, his daughter from an 11-year affair with Sara Keays, appeared on TV with her mother to complain about his neglect of her. Now a long-time former business benefactor is in trouble. Ten years ago, Lord Parkinson agreed to become chairman of the offshore-based Dolphin Holdings, master company of a business empire built up by Kenyan Asian businessman Ketan Somaia. Dolphin was set up in the tax haven of Bermuda, but run from offices in Dubai. This arrangement meant there was no public disclosure of financial details, such as Dolphin's profits or Parkinson's pay. Somaia jetted between offices in Dubai and London, where he and Parkinson were to be found in an imposing Mayfair building round the corner from Grosvenor Square.

No longer. The key Dolphin company in Britain collapsed last November. The building is still occupied by the Delphis Bank of Mauritius, but Somaia is no longer chairman of that bank. Meanwhile, another Somaia-linked Delphis bank in Kenya has been closed by the regulators. This followed a run by nervous depositors prompted by news that Somaia had been made bankrupt in London by Indian entertainment tycoon Subash Chandra of Asia TV. Chandra bought Somaia's stake in the London-based satellite TV station in 1995. Somaia's bankruptcy was later annulled, but the Nairobi bank stays closed pending the injection of new capital. Dolphin companies have also been pursued in the courts in London and Kenya by creditors. The giant U.S. Starwood hotel chain is seeking to enforce a multimillion pound judgment in Kenya. And rival Kenyan Asian businessman Kamlesh Pattni, has been seeking to obtain control of Dolphin's Kenyan assets through the local courts, claiming he bought shares in the companies in 1992 and 1993. Somaia denies this.

Luckily for Parkinson, he is no longer on the Dolphin payroll. After eight years he parted company with Somaia in 2000—just before the storm began to break. But his longstanding role with Somaia and the way in which the former Cabinet minister gave him credibility will once again raise questions about his judgment.

Some 10 years ago, Somaia went to a Tory Party fund raiser—the Winter Ball. He was at a table with Pattni—the man now trying to wrest control of his Kenyan assets. At that time, the Tories were keen to stress their attractions to Britain's hard-working and often Conservative Asian community. Somaia knew at least one well-known Tory. He had met Mark Thatcher in Kenya. Thatcher was interested in motor-racing, and Somaia owned a number of motor dealerships.

By the end of 1992 Parkinson had agreed to become the Dolphin chairman. Somaia, a former timber merchant, also knew a lot about political influence. The rapid rise and rise of his Dolphin Group from the mid-'80s had been helped more than a little by his friends in the circle around Kenya's long-serving president, Daniel arap Moi. By the mid 1990s, with Parkinson as chairman, Somaia's empire stretched from India to the UK. It included Kenya's premier hotel chain as well as TV, radio, newspapers, and magazines aimed at the global Indian population. He snapped up the Kenya and Mauritius branches of the collapsed Bank of Credit & Commerce International. Parkinson visited Moi during a subsequent trip to Kenya.

Somaia had recording studios in London and a leisure project in Milton Keynes. Dolphin published the newspaper Asian Age in Britain. Parkinson hosted a party for the newspaper at the Café Royal in London in 1997. Somaia expanded into South Africa, acquiring a 25-year monopoly to develop three flagship game parks in the northern province of Mpumalanga in a secret deal which has spawned controversy and investigations. Parkinson visited South Africa in 1996 to promote the project.

By the late 1990s Somaia was no longer so welcome in Kenya. On four occasions he declined to appear before a Parliamentary committee investigating why money had been paid up front for security equipment which had not been supplied to the Kenya police. Somaia has always denied any wrongdoing over the Kenya contract or that he had to testify before the committee, and his lawyers have been busy contesting the claims by Pattni and others. But pressure on the Dolphin empire appears to be mounting.