Kimunya quizzed in hotel probe sale

Former Finance minister Amos Kimunya and Central Bank Governor Njuguna Ndung’u Monday appeared before a parliamentary committee to answer questions on their roles in the controversial sale of the Grand Regency Hotel.

Mr Kimunya who stepped aside as Finance minister early this month to pave way for the investigations, was questioned in the afternoon while Prof Ndung’u had appeared before the MPs in the morning.

Sources said the Governor was asked to confirm if CBK had received the full amount of Sh2.9 billion for the sale of the hotel. He confirmed that the bank had indeed received the cash.

Libyan company

He gave the history of the Grand Regency saga from 1994 up to the time of the sale to a Libyan company and argued that the deal was above board.

The committee asked Prof Ndung’u to table all documents relating to the sale. The governor confirmed to the committee that the 90 per cent payment which had been deposited in an escrow account at the NIC Bank had been sent to Central Bank.

The three lawyers appearing for CBK — Mr Philip Murgor, Mr George Oraro and Mr Waweru Gatonye — told the committee that the bank followed every law when concluding the sale.

Mr Kimunya and Prof Ndung’u are some of the principals in the sale of Grand Regency because of their official roles.

A commission of inquiry appointed by President Kibaki will start public hearings into the deal on Monday. The commission is chaired by a former Chief Justice Abdul Majid Cockar.

Mr Kimunya, who had been questioned by the committee earlier this month, was recalled to shed more light on the controversial transaction.

The Kipipiri MP arrived at County Hall, Nairobi, venue of the committee’s hearings at 2pm but it was not until 3.25pm when he walked into the building.

Mr Kimunya had arrived in a private vehicle but did not alight. He then drove to the nearby Continental Building where MPs have offices and stayed there briefly before returning with his lawyer, Prof Githu Muigai.

Mr Kimunya got into trouble with his Cabinet colleagues and MPs who claimed that the Finance Ministry had secretly sold the hotel to a Libyan firm.

When the question was first asked in Parliament last April, Mr Kimunya denied that the hotel had been sold dismissed the claims as “bar-talk”.

A fortnight later, he confirmed that indeed the hotel had been sold for Sh2.9 billion ($45 million).

Later, Lands minister James Orengo said the hotel had been sold for Sh1.8 billion but it emerged this was the price for the land only. The furnishing, machines and other moveables had been sold for Sh1.1billion.

Mr Kimunya’s belated admission of the sale angered MPs, who had accused him of setting them against the public, when he proposed, in this year’s Budget, to have the MPs’ allowances taxed.

The MPs accused the then minister of misleading the House over the sale and passed a vote of no-confidence against him early this month.

They accused him and several other public officials of failing to follow the rules and regulations on the sale of public assets during the sale of the hotel, the Safaricom shares and other transactions involving parastatals like the Kenya Posts and Telecommunications.

In his defence on the floor of the House, Mr Kimunya said that the hotel deal had above-board and that his conscience was clear. According to him, he had not personally profited from the sale. He also maintained that he would be let off-the-hook after investigations were complete and if politics was divorced from the saga.

He has since appeared before the Parliamentary Select Committee investigating the sale of the hotel, under the chairmanship of Nambale MP Chris Okemo.

Before to he declared that he was stepping aside, Mr Kimunya had said that Prime Minister Raila Odinga, Kenya Anti-Corruption Commission director Aaron Ringera, Attorney General Amos Wako and Mr Orengo had received information about the deal.

Speaking at a rally in his Kipipiri constituency after he was censured, Mr Kimunya said that these officials must resign too if he was to resign.

But Mr Odinga said he received information about the sale of the five-star hotel after the deal had been concluded. Mr Kimunya resigned from the Treasury and President Kibaki appointed Environment minister John Michuki to fill the position in an acting capacity.

Mr Kimunya is likely to be called to testify before the Cockar commission once its starts its sessions next week.

Inquiry begins

But even as the inquiry begins, the Libyan investors have quietly taken over of the hotel. On Saturday, the new management held a meeting with the staff and informed them of impending changes.

An employee who attended the meeting said that the sale to Libyan-Arab Investment Company was officially confirmed by the hotel’s general manager, Mr Solomon Adede.

At the height of the controversy, the Libyan embassy defended the deal, saying it had been a “government-to-government transaction” and was above board.