PNU fools ODM – A sale that the junior partner in Government, ODM was not supposed to know
Posted by African Press International on June 29, 2008
PNU has managed to fool ODM. A sale was not meant to reach the ears of the junior partner ODM, but it has and many are now wondering whether ODM really believes the party and Raila are actually part of the government at all. They are there to cool the tempers of their supporters, but are not in control of anything. Most of the ODM ministers are satisfied to fly the ministerial flag but wields no meaningful power. (API)
Outrage over secret sale of Regency hotel
Story by LUCAS BARASA and ALFONCE SHIUNDU
Kenyans expressed outrage on Friday over revelations that the five-star Grand Regency Hotel had been sold in a secret deal that may have cost taxpayers Sh5.5 billion.
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| The entrance to the luxurious Grand Regency Hotel. Photo/PETERSON GITHAIGA |
And a parliamentary committee summoned Lands Minister James Orengo, who disclosed the sale, to shed more light on the transaction.
The outrage came as Finance Minister Amos Kimunya, who until now was insisting that the hotel had not been sold, confirmed that it was actually sold to the Libyan Government through going concern and the final transaction done this week.
Mr Kimunya said Mr Orengo did well to blow the whistle over the sale and added that his ministry could not have involved every ministry whose operations were related to the hotel in the transactions.
Shame and fraud
Speaking at his Treasury office, Mr Kimunya expressed happiness over the disposal of the hotel formerly owned by Goldenberg saga architect Kamlesh Pattni, saying the offer was too good to turn down.
But Parliaments Finance, Tourism and Trade committee, headed by Nambale MP Chris Okemo has ordered Mr Kimunya and Central Bank of Kenya head Njuguna Ndungu to appear before it.
Transparency International chairman Richard Leakey termed the saga a shame and a fraud.
International Commission of Jurists director Wilfred Nderitu supported Dr Leakeys sentiments.
Dr Leakey, who was speaking at a workshop on the Freedom of Information Bill, said such fraud occurred in government because nearly all documents are classified.
It is appalling that a sale of such magnitude, can go on without the knowledge of the minister and his permanent secretary, he said.
A furious Dr Leakey recalled his days as the Head of Public Service, when information is stamped as confidential, secret and top secret.
It is this secrecy that leads to this kind of illegal business in government houses, he said.
The TI boss called for the urgent enactment of the Freedom of Information Bill, saying it was the only way to make public officers accountable.
Mr Okemo said his team would fight for the truth about the transaction.
Kenyans must know who is behind the scam. The Sh2 billion is peanuts and based on valuation done in 1990s, the value of the hotel is now between Sh6 billion and Sh7.5 billion, said Mr Okemo.
The Grand Regency was at the centre of the Goldenberg scandal in which the taxpayer was conned of Sh160 billion in a fictitious gold exports racket masterminded by Mr Pattni.
Mr Shakeel Shabir, a member of the committee added: Even residential property worth Sh6 million 10 years ago now fetches Sh15 million.
Mr Okemos committee said it wrote to Mr Kimunya on May 29 and asked him to ensure that no further transactions on the matter occurred after he insisted the hotel had not been sold.
Unusually, the letter was answered the same day, with Finance Permanent Secretary Joseph Kinyua saying Mr Kimunya was not comfortable with the position taken by the committee on the matter.
Mr Kimunya was later summoned to re-appear before the team on June 6, but he did not show up.
The next thing we hear is that the hotel has been sold at Sh2 billion. We (committee) are not acting on our own behalf but Parliament, which has a constitutional oversight role, Mr Okemo said.
His committee would present a report after questioning Mr Orengo on matters relating to his ministry, Mr Kimunya and Mr Ndungu, added Mr Okemo.
Parliament, he said, would recommend specific action against those who sold the hotel. He accused the executive of belittling Parliament in the saga.
Mr Ntoitha Mmithiaru, the Igembe North MP and member of the committee said: There could have been some arm-twisting in the disposal of the hotel. Somebody somewhere has special interest.
Mr Shabir said Kenyans have been cheated and that the 10th Parliament will not allow graft to prevail as in the past.
He said investigations revealed Mr Pattni had been given amnesty over cases he was facing in court for surrendering the hotel. He added that the hotel was sold six months ago and that only its transfer, which Mr Orengo said was done on Wednesday, was remaining.
Even the adjacent parking lot was sold around the same time, he said and regretted that the public coffers were in the hands of people with questionable credibility.
Grand Regency has been in the news since March following reports that Mr Pattni had returned it to CBK and sold it in exchange of amnesty.
Mr Kimunya and Mr Ndungu have since appeared before Mr Okemos committee and denied that it had been sold.
The committee also questioned the monetary value of the hotel and whether proper government procedure was followed.
The team also wanted to know how the hotel would be disposed of so that the taxpayer does not lose a penny in the transaction.
But Mr Kimunya said the sale was above board, ends a 15-year court tussle, will strengthen Kenyas relationship with Libya, and bring other investors into the country and that the Sh2.9 billion.
We have secured jobs and business. Central Bank of Kenya has got its money back. The people of Kenya have got their money back and the relationship between the two countries is now deeper, he said.
He said the Libyan Government bought the hotel through one of its investment companies and that the Kenyan Government was preparing to hand it over.
The minister, whose tenure has been hit with hue and cry over the ownership of Safaricom and a tender to print new currency, said the Libyan Government was chosen to buy the hotel through private treaty, in which the vendor only approaches parties they think can buy what they are selling. The vendor also decides on who finally buys the property.
The CBK, said Mr Kimunya, asked potential buyers to give their offers and the Libyan Government emerged the best, with the second bidder offering Sh1.8 billion.
Three valuers
Although the parliamentary committee on Finance, which had written to Mr Kimunya to stop the sale of the hotel says the property is valued at between Sh6 billion and Sh7.5 billion and that valuation done 15 years ago placed it at Sh2.5 billion, Mr Kimunya said three valuers put the price at a maximum of Sh2.1 billion in February.
He said the hotel receiver managers since 1999 were to blame for the deteriorating price due to poor maintenance. The hotels ceiling and other facilities were in bad shape compared to 1993, he said.
Mr Kimunya said CBK speedily sold the hotel because it did not want to be dragged back to court or engage in the hotel business. The minister said all money collected from the hotel since 1999 would be given to CBK, bringing the total, including the selling price, to Sh3.3 billion.
Sh340 million is awaiting settlement of the hotel liabilities, including salaries.
Mr Kimunya said the sold asset is plot number LR209/9514 with the building with it.
He said the Libyan Government had also expressed interest on the land adjacent to Grand Regency which was used as a private parking lot and which the National Social Security Fund wanted to sell. He however said his ministry had nothing to do with the adjacent land.
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API/Nation.ke
