Cockar Inquiry winds up hearings

October 13, 2008 12:00 am

, NAIROBI, October 13 – Lawyers made their final submissions to the Cockar Commission on Monday differing sharply on the transparency and legality of the sale of the Grand Regency Hotel.

Former Finance Minister Amos Kimunya’s lawyer Professor Githu Muigai refuted claims that the Kipipiri MP failed in his oversight role over the Central Bank of Kenya (CBK). He said that according to the law, the head of the Treasury was in charge of fiscal policy and could therefore not interfere with the running of the CBK.

He said that Mr Kimunya only directed the bank to ensure that it realised its security (against a Sh2.5 billion loan to businessman Kamleh Pattni) at the earliest opportunity.

“By distancing himself from the specifics of how the public money was realised, the minister respected the independence and autonomy of th Central Bank and acted within the law,” Prof Muigai stated.

He reiterated that none of the 21 witnesses had made any evidence available that directly implicated Mr Kimunya of any wrongdoing and maintained that the whole saga was politically motivated.  The Kipipiri lawmaker was forced to resign at the height of the controversy after Lands Minister James Orengo accused him of complacency in the deal.

Mr Kimunya however maintained his innocence noting that the sale was a government-to-government deal between Kenya and Libya but Parliament nevertheless passed a Motion of no-confidence against him setting the stage for his exit from the Cabinet.

President Mwai Kibaki subsequently appointed the commission headed by Justice Abdul Majid Cockar to establish the role played by Mr Kimunya, CBK Governor Njuguna Ndung’u and the bank’s secretary Kennedy Abuga. The commission heard submissions from lawyers after it concluded its public hearings a week ago. Monday’ session was its last before retreating to make its final report which is expected to be handed over to President Kibaki by the end of October.

Monday’s proceedings turned into a two-camp affair with one side giving the transaction a clean bill of health while the other raised issues over its ‘secrecy’ and the Kenya-Libyan connection.  Assisting Counsel Francis Etiole and Westmont Holdings lawyer Harrison Kinyanjui noted that the secrecy begged for answers. The two said that by failing to advertise the asset denied the country an opportunity to realise maximum funds from the sale.

“This transaction can never be said to have been transparent. It was conducted through SMS’s, calls and visits that had absolutely no form of record,” Mr Kinyanjui said.

Businessman Kamlesh Pattni transferred the hotel to the CBK in April this year in repayment of a Sh2.5 billion debt he owed the bank. The bank sold it through a private treaty at a cost of Sh2.9 billion causing public outcry. Professor Ndung’u appeared before the commission and defended the move saying that it was meant to avoid legal tussles with creditors and receiver managers.

Lawyers Stephen Mwenesi of Adan, Makokha and Wetangula advocates, Michael Mubea for the Libyan investors and Phillip Murgor of the CBK backed professor Ndung’u’s statement and maintained that the transaction was done in accordance with the law.

“James Orengo admitted that he had half baked information and I have shown parts of that information that are totally wrong. He came and tried to stick to it. I urge this commission to totally disregard his evidence,” Mr Murgor said.

Mr Mubea sought to clarify that Libya Africa Investment Company (LAICO), which purchased the hotel was an entity of the Libyan government.

“We have received evidence from the Registrar General showing that LAICO is owned 98 percent by the Libyan government. The Chief of Staff in the government of Libya came here and confirmed the true status of this company,” Mr Mubea said.


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