Raila now seeks answers on Grand Regency deal

The Grand Regency saga took a new turn on Sunday with Prime Minister Raila Odinga asking Kenya Anti-Corruption Commission to explain how Kamlesh Pattni surrendered the hotel to Central Bank. Raila wrote to the Aaron Ringera-led team following a story in the press last week ago raising questions on the deal. Sources indicated that the PM wants the information because he may be required to explain the matter in Parliament or to donors. This will be in line with his constitutional role as coordinator and supervisor of government ministries.

The five-star hotel in the heart of upmarket Nairobi has sparked controversy following reports that it had been sold to Libyan investors. However, Central Bank governor Njuguna Ndung’u and Justice Ringera have denied the reports. Finance minister Amos Kimunya has said the hotel, which has been at the centre of legal battles between the bank and Pattni for 15 years, will be sold within a month through auction. Attorney-general Amos Wako has said he was not consulted in the surrender deal raising questions on why the chief legal adviser to the Government was kept in the dark.

The bank and KACC have also denied claims that Pattni gave up the hotel in exchange for amnesty on all pending court cases relating to the Goldenberg scandal. Imenti Central MP Gitobu Imanyara has taken the matter to Parliament and Kimunya was expected to issue a statement on Tuesday. Imanyara wants the minister to give the status of the hotel and shed light on the Libyan company said to be interested in it.

The minister is expected to give details on how the surrender deal was struck and the Government officials involved. Kimunya will also identify the Libyan firm’s local partners following speculation that a Kenyan company linked to powerful politicians is behind the transaction.

Current value
In addition, Kimunya has been asked to state the hotel’s current value and give assurance that this will be the bidding price. The hotel’s value is estimated to be more than Sh7 billion. On sunday, Imanyara asked why the Government was in a hurry to sell the hotel. He said the Government announced that it had found a suitable buyer for the prime property after President Kibaki’s visit to Libya in May last year. According to the MP, the purchase of the hotel was among six projects that the Libyans had expressed interest in when the President visited the oil-rich North African country. “If the Government has not already sold it, why is the sale being hurried just because the public has raised issue over the matter,” said Imanyara.

He asked Kimunya to explain what he meant when he declared that the property would be sold to the highest bidder yet he had tagged Sh2.5 billion price to the hotel. The MP argued that the hotel was worth more than Sh7 billion since the price quoted by Kimunya had been set by Central Bank 15 years ago. “Mr Kimunya should tell Kenyans why they are underselling it. The price at which the hotel should be sold should also include any interest accrued over the years,” Imanyara said.

The MP also raised issue with the minister’s statements that a lot of people had expressed interest in the hotel. He asked him to explain how, when and by whom the interest had been expressed since the sale had not been advertised. Imanyara also questioned how Pattni could hand over the hotel to the Ringera commission yet it was under receivership.

Camouflage
He described the move as a “stage-managed choreography to camouflage the fact that the property has already been sold. “The Government must also explain if the shareholders of the Libyan company that expressed interest in the hotel are not the same with those of a local group with high connections,” said Imanyara. He stressed that MPs were demanding that the planned sale be stopped and that hotel be handed over to Utalii College. “The college has the capacity to run the Grand Regency as it has successfully done with the Utalii Hotel. The institution can form a public company to run the hotel that will then issue an IPO to Kenyans,” he said.