Valuer defends Sh2b Regency price tag

August 8, 2008 12:00 am

, NAIROBI, August 8 – Chief Government Valuer Anthony Itui Friday defended the Sh2 billion price tag that he attached to the Grand Regency Hotel, insisting that it was arrived at using the best valuation method.

In his defence at the Cockar-led Inquiry probing the controversial sale of the multi-billion shilling Hotel, Itui clarified that only the value of the land and the buildings had been taken into account and not the books of accounts, because Grand Regency was making losses at the time.

Itui told the Commission that he was more concerned with establishing the Stamp duty to be charged on the property and not the sale value.

“In short what I’m saying is that I dealt with immovables,” Itui maintained.

The valuer stated that he avoided the Investment/Profit method in favour of the Contractors method in valuing the building, but used comparative methods for the land on which it stands. He quoted the five-acre plot opposite the Hotel as its main comparative.

“We would have been happy to find a very thriving hotel but what we got was something you could not really work on, it would have undervalued the hotel,” he noted.

Itui however denied being under any pressure from Treasury.

“When you talk about the Commissioner of Lands, I was under pressure to give him the final verdict; I could not attend to other things as long as that file was around,” he explained.

Senior Registrar of Titles Rosina Mule, who was the second witness of the day, was at pains to explain how she ordered the correction of the value of the sale of the Hotel from Sh2.5 billion to Sh1.85 billion.

Mule defended her action to cancel the initial figure, noting that it had been entered erroneously.

“The documents talk about Central Bank having advanced Sh2.5 billion to the borrower, we have another figure of Sh1.85 billion which was the consideration. But the officer who made the entry picked Sh1.85 billion instead of Sh2.5 billion,” she voiced.

Lands Minister James Orengo had indicated that the hotel had been sold at Sh1.85 billion and not Sh2.9 billion as claimed by Former Finance Minister Amos Kimunya.

However, according to Lands Ministry officials, Orengo’s value was the money CBK had wanted to recover from the sale of the Hotel, while Kimunya’s was the sale price that also incorporated other figures including the Stamp duty and goodwill.

The commission adjourned its sittings prematurely to decide whether lawyers should be allowed to ask questions that don’t directly relate to their clients and the investigations at hand.

Before the adjournment, Counsel Harrison Kinyanjui representing Westmont Holdings, which had initially wanted to purchase the hotel in 1997, wanted Mule to explain why she allowed the sale despite a court injunction.

Assisting Counsel Wilfred Mati objected, noting that Kinyanjui’s pursuit was likely to open up other cases linked to the sale that were not the mandate of the commission.

Cockar’s team will make the ruling on Monday.


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