African Press International (API)

"Daily Online News Channel".

Grand Regency: Probe team to quiz ministers

Posted by African Press International on July 10, 2008


Cabinet ministers, MPs and top members of the security forces will be investigated to establish the roles they might have played in the controversial sale of Grand Regency Hotel, Prime Minister Raila Odinga said on Wednesday.

President Mwai Kibaki

Focus was also shifting to Central Bank Governor Njuguna Ndungu and National Security Intelligence Service director Michael Gichangi who are still in office after they were also mentioned adversely over the deal.

At the weekend, Mr Kimunya had said that if he were to step aside, the Prime Minister, the minister for Lands, Mr James Orengo, and the Kenya Anti-Corruption Commission director, Mr Justice Aaron Ringera, should also do the same. Mr Kimunya quit office on Tuesday.

The Prime Minister was on Wednesday awaiting direction from the President on the next step to take in the investigations.

The Office of the PM is not even sure how the investigations are going to be carried forward. We are letting the President make the decision because he is the one who wields executive authority, said a source.

He also said the President was set to name a new team to carry out the investigations. But Mr Odinga said key public officers involved in the controversial sale of the five-star hotel will not be spared.

There is no limit to the number of people who are going to be questioned, he told the Nation in a telephone interview. That is what a comprehensive investigation means.

Last week, the Cabinet committee on Finance, Administration and Planning set up a team led by Attorney-General Amos Wako to peruse the sale documents.

The Wako team submitted a report to the committee a day later. The report was later presented to the President.


Last week, Mr Kimunya said he had no confidence in the team appointed by Cabinet committee. Among its members were Mr Wako, Mr Ringera, Mr Orengo and an official from the PMs office, Mr Karoli Omondi.

Meanwhile, the Parliamentary Committee on Finance, Industry and Trade, which is chaired by Nambale MP Chris Okemo, is also carrying out its own investigations.

The committee will on Thursday question Mr Orengo, Lands permanent secretary Dorothy Angote, the Commissioner of Lands, Mr Zablon Mabea and the registrar of titles.

Others to be summoned are Mr Kimunya, Central Bank of Kenya governor Njuguna Ndungu, Mr Justice Ringera, directors of Libyan Arab African Investments Company, businessman Kamlesh Pattni and law firms involved in the transactions.

On Tuesday, House Speaker Kenneth Marende gave the Okemo committee two weeks within which to conclude its investigations.

Meanwhile, the Government is widely expected to make a key announcement on the Grand Regency saga by Thursday.

The sale of the hotel was first reported in the Saturday Nation of April 19, but Government officials at the time denied the reports. Mr Orengo said the hotel had been sold two weeks ago after which Mr Kimunya confirmed the sale.

The hotel was sold to the Libyan African Investments Company for Sh2.9 billion ($45 million). However, critics of the sale have said that the hotel was undervalued while the deal was shrouded in secrecy.

However, Mr Kimunya has said that the AG was aware of the transaction and met with lawyers representing Central Bank and the Libyan company at least seven times.

But the AG has denied the claims, and on Tuesday, he directed the police commissioner to start investigations into the sale.

The sale caused a storm in Parliament which led to MPs passing a vote of no-confidence in Mr Kimunya last week. Mr Kimunya resigned five days later.

The AGs directive to the police boss was meant to take away the investigations from politicians following claims that some of them were aware of the sale while others had been mentioned adversely.

Mr Kimunya, who had earlier said that he would rather die than resign, chose to step aside on Tuesday after consultations with the President, his colleagues and his family. Last weekend, he had demanded that the PM, Mr Orengo, Mr Wako and Justice Ringera should also step aside.

But in a Prime Ministerial statement read in Parliament on Tuesday, Mr Odinga, defended himself saying he was kept in the dark on the fine details of the transaction.

The PM said that Prof Ndungu presented to him undated and unsigned documents on the sale of the hotel, while his request to the Anti-Corruption Commission to furnish him with all the information only yielded the settlement agreement.

He also said that a contradictory statement that Mr Kimunya issued in Parliament on April 29 prompted him to start investigations.

It emerged on Wednesday that investigators were on the trail of the two sets of payments that were made for the hotel by the Libyan firm.

Said Mr Odinga: We know the first payment of 10 per cent is with the Central Bank and the remaining 90 per cent is being held in the lawyers account.

Ikolomani MP Bonny Khalwale, who moved the motion of a vote of no-confidence, claimed that 90 per cent of the payment was being held in an account at the NIC Bank in Nairobi. There is nothing we can do about the escrow account although we should be told why the payments could not be wired directly to the Central Bank, he said.

Rightful owner

An escrow is a special account in which a lawyer or an agent deposits money that does not belong to him or his firm awaiting transfer to the rightful owner.

The controversy surrounding the sale of Grand Regency took a turn on Monday last week when Mr Orengo claimed that it had been sold for only Sh1.8 billion and not Sh2.9 billion.

It later emerged that the Sh1.8 billion was the price of the land and the building. The furnishing and machinery were sold for Sh1.1 billion. But critics have questioned why no goodwill was paid yet the hotel was sold as a going concern.



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