African Press International (API)

The minister, who came out on Friday after his colleague exposed a secret ‘discharge’ on Thursday, said the offer by the oil-rich State was “too sweet to resist”.

The controversial sale, initially denied by Finance Minister Amos Kimunya, now presents President Kibaki and Prime Minister Raila Odinga yet another test on their commitment to power-sharing deal, team-building and anti-corruption war.

Before Kimunya’s confession, the Grand Coalition Cabinet had split on the matter along the traditional Party of National Unity and Orange Democratic Movement fault line.

The sale is yet another chapter in the multi-layered story now on the 15th year. Built on stolen public funds by businessman Kamlesh Pattni of the Goldenberg notoriety, the disgraced architect of one of the country’s biggest scams returned it in exchange for termination of court cases lined up against him.

Another leaf on the tripartite barter trade between Pattni, Central Bank and the Kenya Anti-Corruption Commission turned as another battlefront opened up in the Grand Coalition. Libyans, according to Kimunya who initially denied the sale was on, now own the hotel paid Sh2.9 billion. But according to the relevant parliamentary committee, which has summoned two ministers at the centre of the latest storm, the value for which it was sold, is a decade-old. It argues the edifice at the heart of Nairobi, the preference of visiting heads of State, moneyed tourists, and private sector mandarins, it could have easily fetched Sh10 billion.

Kimunya faced the camera, and in a change of tune following Lands Minister James Orengo’s disclosure on Thursday, it is gone, said it went for Sh2.9 billion. It went under a private inter-government arrangement, no bidding and no publicised negotiations.

Last evening it was believed not even the Party of National Unity’s coalition partner, Raila’s ODM, was in the picture.

“We had an offer that was made and we thought it was too good to refuse. Indeed the best offer that we received came from the Government of Libya,” Kimunya told reporters at his Treasury office.

He added: “We are very happy that the deal has succeeded.”

The minister, who just waded the storm raised by the Safaricom Initial Public Offer, said three independent valuers commissioned by CBK in February valued the property at Sh1.62 billion, Sh1.75 billion and Sh2.18 billion. He said the Libyan Government gave a price that was much higher than the highest received.

Kimunya, however, did not provide evidence of the bids and the valuation reports.

He saw another sunnier side to the deal: It would help deepen the relationship between the two countries. “We are organising for a handing over so that the new owners can come in and we exit.”

And because of the latest storm, which could undermine the new Government’s claim to tag of enemy of corruption, Parliament is now going to question two ministers, one from each side of the coalition, and the Central Bank Governor. The sessions will be an expedition through the possible truth and lies Government officials gave either to justify or camouflage the hotel’s sale, whimsically seen as Anglo Leasing II.

The centre of the latest face-off is the controversial sale of Grand Regency Hotel; the five-star edifice built using the billions skimmed by the disgraced businessman through Goldenberg International Limited.

Thursday Orengo said though his ministry would have been involved in the paperwork following the secret hand-over deal between Kenya Anti-Corruption Authority and Pattni, everything was done behind his back. He said he was speaking up as a matter of personal honour and conscience; notwithstanding he could be accused of breaching the Cabinet’s cardinal rule of collective responsibility.

 

He revealed the hotel which could cost more, had gone for Sh2 billion, right behind his back, and Sh900m less than the figure Kimunya gave. Though the tourism market had been throbbing with claims it was sold to Libyans, believed to be proxies of their President, Muammar Gaddaffi, it was not until Kimunya spoke, that he confirmed what the public had heard before. However, some Libyan nationals who have been frequenting the hotel had told some of the employees they were now their new ‘bosses’, and should be served even after the opening hours set for some of its expensive bars.

When Pattni bartered the hotel for amnesty in the corruption courts, Attorney General Amos Wako, said he too was in the dark. He insisted Pattni’s cases would go the whole hog.

On Friday, the latest corruption claim swirling around President Kibaki’s Government, second only to the Sh7 billion Anglo Leasing in his first term, snowballed as Parliament stepped in.

The House committee investigating the controversial sale pledged to unmask the new owners of the controversial property.

Finance House Committee chairman Chris Okemo revealed it would summon Orengo to table evidence of the land transactions and documents relevant to the deal.

Okemo’s committee argues it could have gone, just when the Government thought it had won it back, in total disregard of Procurement and Disposal Procedures of Government.

The committee also wants public interest protected and its oversight role and independence respected by the Executive, as well as ministers to honour summons.

But later Kimunya said the Public Procurement Oversight Authority (PPOA) had sanctioned the sale in April.

“We received a letter saying the committee had said we should not sell the hotel but as for me, meeting the committee and the sale of the asset are completely unrelated.”

He added the transaction was in the best interest of the people.

“We are answerable to Kenyans and to Parliament. This is a matter of great public interest and the truth must be told,” Okemo said on Friday.

“The committee has been taken in circles enough times and we will summon Orengo, Finance Minister Amos Kimunya, and Central Bank Governor Prof Njuguna Ndung’u to come clean on the deal,” Okemo announced.

Okemo accompanied by committee members Mr Ntoitha M’Mithiaru (Igembe North) and Mr Shakeel Shabbir (Kisumu East), at a Press conference in Parliament, challenged Kibaki and Raila to help unravel the scandal.

“Kimunya, even after a written caution, proceeded with the sale in total disregard of the law. He must explain why,” Okemo said.

KACC Director Justice Aaron Ringera would also reappear before the committee to shed more light following fresh revelations.

 

 

Okemo read details of a letter Kimunya wrote through his Permanent Secretary Joseph Kinyua, to the committee, saying he was uncomfortable with the manner it was pursuing the matter.

“We are concerned that Government officials have been hiding crucial information from us, but Orengo’s statement has confirmed our fears, the hotel may have been sold irregularly,” Okemo said.

“We will demand to know from Kimunya and Ndung’u why the sale was allowed to proceed even after Parliament advised against the same.”

On Thursday Orengo said he was embarrassed his Finance colleague had sold the Grand Regency Hotel behind the Cabinet’s back and vowed he would escalate his complaint right up to the President.

In the press briefing Okemo added: “It appears Parliament’s role is being ignored by the Executive. We will make recommendations to the House for stern action to be taken against those implicated.” M’Mithiaru queried why a price of Sh2 billion was accepted yet it was the value of the hotel land and building over 10 years ago.

Two committee members accompanied Okemo – Mr Ntoitha M’Mithiaru (Igembe North) and Mr Shakeel Shabbir (Kisumu East).

“We are told businessman Kamlesh Pattni owed Central Bank Sh2.5 billion. If the hotel was sold for Sh2 billion where is the balance of Sh500m, and didn’t this debt accrue any interest?” M’Mithirau asked.

“Kimunya must stop ducking meetings with the committee. Last week he said he was busy with the Budget and has since been avoiding us. We are ready for him even now,” Okemo said.

Kimunya argued legally, CBK being the chargees, would single-handedly choose whom to sell the property to through either private treaty or public auction.

He said the bank opted to sell off the property through private treaty.

The hotel had been placed under charge in the mid-1990s over US$210 million (Sh14 billion at current exchange rates) that Pattni’s defunct Exchange Bank had borrowed from the Central Bank and failed to pay. Pattni said he had surrendered the prestigious hotel under the Economic Crimes Act of 2003, which allows for pardoning of perpetrators who forfeit proceeds and assets from stolen public funds to the State.

The Libyans wanted the hotel as part of their bid to entrench themselves into Kenya’s business sector. In March, when the country was in the thick of a political stalemate, President Kibaki flew to Kampala to meet Libya’s President Muammar Gaddafi who was commissioning a mosque. Eight years after they re-opened an embassy in Nairobi — which was shut in 1987 after the Moi regime accused the embassy officials of espionage — the Libyan oil merchants want to have a footprint in the region and are keen to edge out competitors.

Several MPs among them Jakoyo Midiwo, Martin Ogindo, and Gitobu Imayara, on Friday demanded the truth be told over the matter.

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