Kimunya knew about Regency sale

September 22, 2008 12:00 am

, NAIROBI, September 22 – Central Bank of Governor (CBK) Njuguna Ndungu has said that former Finance Minister Amos Kimunya was fully aware of the sale of the Grand Regency Hotel.

He told the commission investigating the sale that Kimunya and the Permanent Secretary in the ministry were regularly briefed on the transaction and gave their approval from the onset of the negotiations in September 2007.

“The consultation between us and the Ministry of Finance started much early through letters to the ministry and the Permanent Secretary and when we got to the negotiations stage the briefs were both oral and written,” Professor Njuguna said.

He told the commission led by Justice Majid Cockar that he met the Libyan ambassador in September 2007 after the Foreign Affairs Ministry scheduled an appointment to discuss a Memorandum of Understanding that had been signed between the two governments during President Kibaki’s trip to Tripoli earlier in June.
The governor said: “We had a meeting in my office on September 11 2007.  The discussion was Libyan interest to invest in Kenya in general and of course their interest in the Grand Regency.  There were other investments such as Telkom Kenya.”

Professor Ndungu insisted that the hotel’s sale was a government-to-government deal and opined that it was not deemed necessary to involve the Attorney General since the cases (involving Kamlesh Pattni) were of a civil nature which the bank’s legal department could handle.
The governor said the bank’s legal secretary Kennedy Abuga and Uhuru Highway Development Limited (UHDL) lawyer Adan Mohammed briefed him of a consent order that had been registered in a case between the Kenya Anti-Corruption Commission and UHDL.

Prof Ndungu said: “I advised them (legal affairs department) to look for a suitable consent which will assist the CBK to realise its charge.”

He said he first met the Libyan African Investment Company delegation in December 2007 and that subsequent meetings continued until March.

The governor said the issue of the price to be paid was discussed between the months of March and April after a valuation of the hotel was done in February 2008.

The CBK governor said that the both the bank and the Kenya Anti-Corruption Commission had agreed to a private settlement as the means of sale, since it was a more cost effective way of handling the issue

“We had a brainstorming session to discuss the way forward and we did agree on what was cost effective and this was private treaty.  At first they were of the view that we should transfer the bank to CBK and then sell it,” he told the inquiry.

The CBK took over the management of the hotel in 1993 as part of a recovery process of various amounts that were owed to the bank amounting to Sh2.5 billion.


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