Australian Dictionary of Biography

Tirath Hassaram Khemlani (1920-1991), financial broker, was born on 17 September 1920 in India (Pakistan), son of Hassaram Ganggaram, textile manufacturer, and his wife Hemibai, née Khemchand. Little is known about his education and upbringing. His first marriage to Somar, arranged by her mother, ended in 1950 after a daughter, Shanti, and two sons had been born. Khemlani went to Britain in 1950 and studied textiles in Scotland where he traded as an importer and wholesaler of shirts. On 14 November 1968, at the registrar’s office, Paisley, Scotland, using the surname Hassaram, he married Sarah Ann Lambe, a tearoom manageress. In 1971 a London merchant named Tirath Hassaram was declared an undischarged bankrupt.

Khemlani’s sudden entry into Australian politics was in 1974 when he was contracted to raise loan funds for the Australian government. He claimed to have links with merchants in Muscat, Oman, and with some minor Arab rulers. Official inquiries produced an assessment by Johnson Matthey Bankers Ltd, London, that Khemlani was the manager of Dalamal & Sons (Commodities) Ltd, London, and that the company was ‘a wealthy and respectable Indian international group with worldwide connections’ (NAA M3865) that included the Middle East, and had handled transactions of high value to their satisfaction. This endorsement was good enough for Khemlani to enter into an agreement on 8 November 1974 with Tibor Shelley, the director of Opal Exporters Pty Ltd, Adelaide; Globe Control Finance and Trade Co., Basle, Switzerland; and a number of Chinese business partners, to arrange cash loans for the Australian government, which was seeking funds for proposed development projects. Senior ministers in the Whitlam government desired to tap large and new lines of cheap credit in the Middle East as a means to finance projects such as a petrochemical industry, a trans-continental pipeline, and a uranium enrichment plant.

Clyde Cameron, then minister for labour and immigration, later claimed to have been the mastermind of the scheme, building on his contacts with Gerry Karidis, an Adelaide businessman who in turn contacted Shelley. After he became treasurer in December 1974, Jim Cairns was also closely involved with these plans. Having gained cabinet authority to raise loans, Rex Connor, minister for minerals and energy, proposed in his first contacts with Khemlani in Canberra to secure ‘overseas borrowings … up to a total of approximately $US4,000 million … repayable at the end of twenty years’ (NAA M3865).  

Ministerial dealings with Khemlani, described as ‘a small-time Pakistani commodity dealer’ (Farquharson 1994, 4), raised the concerns of treasury officials, led by the departmental secretary, Sir Frederick Wheeler, who saw him as an opportunistic ‘funny-money’ man or ‘carpetbagger’ (Farquharson 1994,). They moved to discredit Khemlani, especially as it became clear that he did not have access to the sums sought. Attempts to investigate him and enlist help from Scotland Yard came to nothing. The Reserve Bank of Australia and the United States Federal Reserve System also had doubts about the origins of the money. Whitlam had been an early supporter of the scheme, but discussions of Khemlani’s role with (Sir) James Wolfensohn, the London-based investment banker and future head of the World Bank, led him to conclude that ‘he sounded like a con man’ (Wolfensohn 2010, 168). As the details of the ‘loans affair’ emerged into public debate, it became one of the central controversies engulfing the Whitlam government. In parliament, Opposition members claimed to be in pursuit of the truth about the means by which the loan was to be raised, and that it was the people responsible who were in their sights. Khemlani was a minor player in the dramatic events that were to follow.

In May 1975 cabinet confined the authority to negotiate overseas loans to the treasurer, but Connor continued to deal secretly with Khemlani, even when the prospect of a loan was reduced to $US2,000 million. When his actions became public in October, he was forced to resign as minister. On an unrelated issue, but revealing of the extent to which the raising of overseas loans was becoming a matter of political sensitivity, Whitlam removed Cairns from treasury and dismissed him from the ministry in July.

Khemlani’s final involvement in the controversy was in October, when he arrived in Australia with documents confirming his role. During an interview on 20 October he claimed that Whitlam knew all along that Connor was continuing negotiations after his authority had been revoked but, instead of supporting him, had used him as a scapegoat. However, Khemlani failed to provide evidence of Whitlam’s involvement. Although the ‘loans affair’ did not lead directly to the dismissal of the Whitlam government, it seriously weakened its credibility and provided the Opposition with cause to question its integrity. After leaving Australia little is known about Khemlani’s activities. In 1981 he was arrested in New York on charges of selling stolen securities and, although convicted, was immediately pardoned. Known as Peter rather than Tirath, he died at Paisley, Scotland, on 19 May 1991, survived by his wife and daughter.