How Laos SMG was defrauded Sh 300 million in Kenya in a bid to trade gold

From (R-L) Jared Otieno alias Johnathan Tololwe, Philip Nahashon Aroko alias Benson Mutola, Dillon Kibet and Pauline Adhiambo alias Rose Omamo in court during the hearing of a case where they are charged alongside 12 others with Sh 300 million fraud. Photo/Sam Alfan

An official of the Simoung Group of Companies has told a Nairobi court how the company was defrauded 3 million dollars (Sh 300 million) in a quest to venture into gold business in Kenya.

Sounthorn Chanthavong who is the legal counsel of SMG told the court that his boss had been informed that he could venture into the business of gold trade in Kenya and there were rich people loaning money at a small interest rate.

In his testimony, Chanthavong who is also the vice-president of Joint Development Bank, one of SMG companies, said the SMG chairman, his assistant and two others travelled to Kenya in early 2019 to meet the owners of the mining companies.

After meeting the alleged businessmen in Kenya, the chairman, Ekaphanh Phapitsack called Chanthavong to come from Laos to Nairobi to check a contract he had been given to sign in regard to the low interest loan.

“I came to Kenya under the instructions of the Chairman, the owner of SMG and the bank,” Chanthavong said.

The Chairman went back to Laos and left the lawyer and his colleagues in Kenya to finish the transactions.

The Charges

In the case, 17 people are facing charges of defrauding the company of Sh 300 million. The accused persons are controversial businessman Jared Otieno alias Johnathan Tololwa, Philip Nahashon Aroko alias Benson Mutola, Ricky Thomas Ochieng alias Tom Okoth, Dillon Kibet, Pauline Adhiambo Odok alias Rose Adhiambo Omamo, Robert Ouko alias Maxwell Oyuga, Peter Omondi Onyach, Michael Omondi Ochieng, Paul Otieno, Alice Nzisa alias Faith Nzisa, Joyce Akinyi Ouma, Juliet Kathambi alias Cynthia Kithinji, William Otieno, Hanington Modisa Lugaye, Madan Olwangu Onyino, Seinim Boukar and Lokole Lokunda Albert.

The 16 are accused of conspiring to defraud Sounthorn Chanthavong, a director of Simuong Group Company from LAO USD 3,000,000 by means of fraudulent tricks and displayed heavy metal boxes allegedly packed with genuine gold bars and having an office trading in the name on NIRONE SAFE KEEPING LIMITED, falsely pretending they were carrying out genuine business.

Jared Otieno, Aroko, Ouko and Ricky are charged with obtaining the Sh 300 million from the businessman at Kaputei Gardens in Kileleshwa, Nairobi pretending they had genuine gold.

On 30th June 2019, Chanthavong arrived in Nairobi and was picked up at the airport by one Mr. Kibet who was part of the people he was going to deal with.

The court heard that Kibet drove him to the company that allegedly traded in gold and after they saw the gold and confirmed it was 97% pure, Kibet told them that he knew people who could give them the money instead of going back to Laos to transact.

The witness said that his boss felt the loan was a fair deal since they only charged a Sh 1.5% interest.

The people willing to lend them the money said they could lend them upto 400 million dollars. However, the Chairman said since it was a first deal they should go for a lower amount first. They decided to ask for 100 million dollars.

The lawyer added that they were taken to meet the loan bosses who introduced themselves as Rose Omamo, Jonathan and Benson. This is where the contract was to be signed.


The court heard that there were two contracts. The first contract was for a USD 100 million loan in which they were told to pay USD 1 million as security since they did not have any security in Kenya.

Chanthavong testified that after going through the contract, they signed it and expected the USD 100 million would be sent to Lao. But it never was.

The chairman had intended to put the money in the Joint Development Bank and lend it to Laos people at a higher interest rate.

The second loan

The investors tried to follow up but the lenders kept giving them excuses. At one point, the court heard, Rose Omamo who played the boss told SMG to give her a USD 2 million personal loan.

SMG agreed and drafted a contract to which was signed by both parties. In the meantime, they still waited for the USD 100 million from her. Irony.

The witness testified that they looked up a Kenyan lawyer on social media to assist them in drafting the second contract since they did not know the process of drafting one in Kenya.

As they waited for the money to be transferred, they went out to drink and party severally.

The SMG lawyer added that they were informed by the lenders that for them to do gold business in Kenya, they needed to register a company in Kenya.

They were also told to make Kibet a director of the company since they needed a local person who knows the country well.

The lawyer further stated that they paid USD 5,000 to register the company under the name SMG Africa Gold Trading Limited.

After doing all they considered necessary, the lenders still did not send the money. The court was told that when SMG tried to follow it up, they were given excuses which eventually turned to threats. 

Fearing for their lives, the lawyer and his colleagues decided to go back to Laos where their boss convinced them to come back to Kenya and follow the matter further. However, the lenders were nowhere to be found and could not be reached on phone.

This led them to report the matter to the police.

The hearing will continue on 26th October 2022.