Grand Regency sold, govt admits

June 27, 2008 12:00 am

, NAIROBI, June 27 – The government  finally admitted on Friday that it had sold the prestigious Grand Regency hotel.

Finance Minister Amos Kimunya said the hotel was sold earlier in the week to a Libyan investor at Sh2.5 billion.

"We had an offer made that we thought was too good to refuse. The highest valuation we had for the hotel was Sh2.1 billion but they offered Sh2.925 billion," Kimunya revealed.

Kimunya said the next closet offer was Sh1.8 billion which treasury considered too low.

The revelation came a day after Lands Minister James Orengo exposed the sale of the Regency hotel.

Orengo had said the hotel was sold for a paltry Sh2 billion far below its market price, which he claimed was pegged at Sh7.5 billion.

But addressing a news conference at his Treasury House offices Kimunya said the hotel was not sold at a throw-away price as claimed by Orengo and others.

Kimunya said the hotel had been run down and could not fetch that much money.

"There has been very little improvement in terms of refurbishment and if given Sh7.5 Billion I would give them three Grand Regencies," he stated.

The five star hotel has been in the news since March when tycoon Kamlesh Pattni returned it to the Central Bank Of Kenya (CBK) in exchange for amnesty.

The deal was struck with the blessing of the Kenya Anti Corruption Commission.

Since then Kimunya and CBK Governor Njuguna Ndung’u have appeared before  Parliament’s Finance and Trade Committee that has been investigation the controversial handover.

Members of a Parliamentary committee on Finance had called a press conference to respond to Orengo’s remarks expressed shock at the revelations.

"Orengo’s revelations are shocking. But we are investigating reports that the hotel may have been sold six months ago. Wednesday may have been a day the hand over was being done," said Kisumu Town East Member of Parliament Shakeel Shabir who sits in the committee probing the saga.

The committee chairman Chris Okemo said they intend to summon the Lands Minister to help shed light on his revelations.

"We have already spoken to him and we understand he is out of town. We want to come and tell us what he knows because it will help in the investigations we are conducting," Okemo told journalists at Parliament buildings early Friday.

The committee had recommended to Finance Minister Amos Kimunya and Central Bank governor Professor Njuguna Ndung’u to suspend the sale plan until investigations on the matter were completed.

The recommendation followed reports that the Treasury intended to sell the prestigious five-star hotel at a mere Sh2 billion without following the laid down procurement procedure.

The hotel was initially owned by wealthy businessman Kamlesh Pattni who was accused of having used stolen public funds through his Goldenberg International Company Limited (GIL) to construct it.

"There is more than meets the eye in this secret sale of a public asset which has not been properly valued. We want the truth to come out," said Igembe North Legislator Ntoitha M’Mithiaru, another member of the Parliamentary committee probing the matter.

M’Mithiaru said the Sh2 billion valuation which Finance Minister Amos Kimunya and others involved in the alleged secret sale relied on was done more than years ago.

"That is why we want to know the truth. Who did the valuation and how was the procurement done," he posed.

The three legislators who addressed a press conference after a meeting at Parliament buildings said they were determined to defend and protect public property.

Asked why the committee had taken too long to get a clarification from the Finance Minister, Okemo said; "He has been evading us. We summoned him and he only showed up after we had left."

Okemo displayed to journalists a letter he wrote to the Minister on May 29, 2008 in which they told him to stop the sale deal "until all issued were ironed out".

On that same day, he said, his (Finance) PS responded saying, ‘Hon Kimunya is not comfortable with the position taken by the committee on the matter. He’d like to have a meeting with the committee’.

"The meeting was scheduled for June 6, 2008 and that is when he came long after we had left," said Okemo.

"Ever since he has been evading us saying he is busy over the budget issues. We are going to summon him again."


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