House Committee to probe Grand Regency saga

June 27, 2008 12:00 am

, NAIROBI, June 27 – Mystery surrounding the controversial sale of the prestigious Grand Regency hotel deepened even further with fresh revelations that the five star hotel may have been sold in January.

Lands Minister James Orengo had claimed that he learnt the secret sale on Thursday and accused some officials in his ministry of having played part.

Orengo, a reputable lawyer, said he had been informed that the sale agreement was secretly signed on Wednesday and gave officials he suspected to have participated in the secret plot seven days to explain the matter.

Members of a Parliamentary committee on Finance who 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.

Pattni was arrested and charged in court before the Kenya Anti-Corruption Commission (KACC) entered into an agreement with him to forfeit the property in exchange of amnesty.

The hotel that sits at a prime plot on Uhuru Highway in Nairobi’s Central Business District (CBD) was then reverted to the ownership of the Central Bank of Kenya which then appointed Receiver Managers.

Financial analysts and property managers estimate it may be valued at more than Sh7 billion at current market rates but it has since been sold at a mere Sh 2 billion.

"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.

Shabir said he suspected the hotel may have been sold to Libyan investors during a recent trip to that country.

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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