Pattni has been a headache for Kenyan economy

Publisher: Korir, api africanpress@getmail.no source.standard.ke

Beginning of the end for Pattni’s empire?

 

By Gakuu Mathenge

This week, Mr Kamlesh Pattni gave up his two-decade battle for the landmark Grand Regency Hotel.

Pattni has been under siege, fighting numerous attempts to jail him over deals with both public and private institutions.

The handing over of the pricey hotel to the Kenya Anti-Corruption Commission (Kacc) was a milestone for the anti-graft agency and Pattni himself.

Kacc secured the first public admission of corruption from Pattni by handing over a corruptly acquired property in the heart of the city. For now, Pattni may have been spared the agony of keeping a battery of lawyers happy, but it is doubtful the law and its agencies are through with him.

The ‘voluntary’ handing over was reportedly achieved through pressure and with the assistance of some 11 whistleblowers. The whistleblowers were former senior employees of the Grand Regency Hotel, who volunteered information on alleged corrupt dealings.

Pattni’s sudden about-turn on the money-minting hotel is said to have caught many of his lawyers by surprise. He informed them of his decision at the last minute, and is said to have ignored their passionate pleas to reconsider the move. During the handing over ceremony on Wednesday, Brother Paul, put it this way: “It has been like chasing the wind, it ends now. I can build ten more hotels like this with wisdom from God.”

He also went spiritual, quoting the Bible: “For what does it benefit a man to gain the whole world then lose his soul?”

Speaking under the glare of TV cameras, Pattni was sandwiched between Kacc director, Justice Aaron Ringera and Central Bank of Kenya Governor, Prof Joseph Ndung’u. According to the agreement, Pattni handed over the hotel to Kacc, which in turn passed it to the Kenya Revenue Authority through the Central Bank.

The hotel’s original owner was the late Mohamed Aslam under the Uhuru Highway Development Limited (UHDL).

Aslam built the hotel between 1987 and 1994, with borrowed finances from the Central Bank.

When Aslam died in the early 1990s, Pattni acquired his assets. With the properties, Pattni approached CBK for an overdraft.

The man, said to be a mathematical genius, got a Sh2.6 billion overdraft facility from CBK through the collapsed Pan-African Bank, ostensibly to finance the completion of the hotel.

The money was never repaid, and CBK consequently placed Pan-African Bank, under receivership with Mr Joseph Kittony as the first receiver-manager.

In 1999, Kittony was kicked out of the hotel by Justice Samuel Oguk and replaced by PVR Rao, who was later replaced by Mr Gitari Njeu. In 2003, Kacc went to court over the hotel’s ownership and Njeu was replaced by Mr Patrick Nzioka. After sometime, Kacc, CBK and Pattni settled for joint receivers, Mr Hezekiah Wang’ombe Gichohi for Kacc and Mr Peter Ndaa, for Pattni.

By the time Kacc came in 2003, the hotel was under huge debts amounting to over Sh100 million. Only last week did the CBK bail out the hotel by injecting more than Sh300 million. On Wednesday, Ringera said the repossession of the hotel by CBK was achieved through negotiations between Pattni and Kacc.

“Last year, Kacc was granted powers to negotiate surrender of stolen public assets and benefits. I hope many who have been served with notices could take advantage of this opportunity instead of waiting for lengthy court battles,” he said at the handing over ceremony.

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African Press International – api