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Last Updated: Tuesday, 27 January, 2004, 09:57 GMT
'Bribery' halts Kenya graft probe
Kenyan policeman helps judge to vacate the court premises
The judicial system in Kenya is under close scrutiny at present
An inquiry into Kenya's biggest financial scandal has been suspended after allegations linking senior investigators with corruption.

Announcing a one-week suspension of the Goldenberg commission, an inquiry official described the reasons for the postponement as "serious and grave".

Kenya lost up to $600m through questionable exports of gold and diamonds between 1990 and 1993. Investigations into Goldenberg International began a year ago.

Kenya's Daily Nation newspaper says bribes were being offered by people anxious to influence the outcome of the inquiry.

This is the second time the commission has been suspended over corruption allegations.

Last year, Vice Chairman Judge Daniel Aganyanya was suspended following an investigation into malpractice in the judiciary.

More than 20 judges were suspended last year after widespread corruption allegations which many deny.

Aid lost

The main player in the scandal - which also involved complex bank transactions - was Goldenberg International company owned by millionaire businessman Kamlesh Pattni.

Goldenberg scandal
Kenya lost $600m
IMF cut aid worth $500m
Commission appointed on 24 February 2003
The Goldenberg scandal cost Kenya the equivalent of more than 10% of the country's annual GDP.

The compensation scheme was designed to promote the exports of gold and diamonds, although Kenya has negligible amounts of either.

Powerful politicians in the former government of President Daniel arap Moi - as well as leading figures in the current administration - have been accused of complicity in the Goldenberg scandal.

The International Monetary Fund (IMF) and the World Bank suspended $500m in aid to Kenya in 1997 on the basis that the government was not doing enough to end corruption in the country, citing the Goldenberg scandal as an example.

Earlier this month a witness alleged that former president Daniel arap Moi ordered the transfer of $76m from the state treasury to the company.

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