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Last Updated: Monday, 24 February, 2003, 13:24 GMT
Probe for Kenya's biggest scandal
President Kibaki
President Kibaki promised to fight corruption

President Mwai Kibaki has announced a probe into Kenya's biggest scandal, the "Goldenberg affair".

The fraud, which began in 1991, is estimated to have cost hundreds of millions of dollars and implicated senior political figures.

The BBC's Ishbel Matheson in Nairobi says that the Goldenberg scheme was simple, audacious and cost Kenya dearly.

A company - Goldenberg International, run by businessman Kamlesh Pattni - is alleged to have received subsidy payments for exports of gold and diamonds, even though the country does not actually produce either commodity.

So massive were the sums of money involved that some have even linked the decline of Kenya's economy to the start of the Goldenberg affair.

Slow justice

Attempts to bring those involved to justice have proved difficult.

Cases have dragged on through the courts since 1994.

Goldenberg commission appointed
Tribunal to investigate chief justice
Anti-graft czar named

"With this Commission, finally the Kenyan people will be able to close one of the most ignominious chapters in the nation's economic history," said a statement from the president's office.

The new commission of inquiry is mandated by President Kibaki to get to the root of the complex web of transactions.

If the three-man panel, led by Appeals Court Judge Samuel Bosire, does its job properly, the results could be explosive.

'No stone unturned'

Senior political figures from the era of former President Daniel arap Moi era have already had their reputations tarnished by Goldenberg.

George Saitoti
Saitoti denies any wrongdoing

These include Professor George Saitoti, the former vice president and now minister of education in the new government.

He has denied any wrongdoing.

President Kibaki has made much since he came to office about fighting corruption.

Our correspondent says that by investigating Goldenberg, he is signalling that no stone will be left unturned.

Last week, Mr Kibaki appointed a tribunal to investigate allegations of misconduct against the chief justice, Bernard Chunga.

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