Top CBK officials ‘rushed hotel sale’

Central Bank governor Njuguna Ndung’u and the board secretary Kennedy Abuga rushed the sale of the prestigious Grand Regency Hotel as they kept it a close secret, a report on of the sale says.

According to the report by a commission of inquiry chaired by Mr Justice (Rtd) Majid Cocker on the sale of the hotel to the Libyan Arab Investment Company (Laico), Prof Ndung’u did not provide enough information on the sale to the relevant government offices, including that of the Prime Minister.

Other members of the commission were Charles arap Kirui and Kathurima M’Inoti.

But Mr Abuga, says the report, was only too willing to carry out all the wishes of the governor relating to the disposal of the hotel without offering an independent professional opinion.

“Even the valuers who were instructed to value the hotel were not told the purpose for which the valuation was being undertaken,” it says.

“At Central Bank of Kenya, Prof Ndung’u and Mr Abuga were solely responsible for the disposal of the hotel.”

The report says the conduct of both officials was in contravention of Section 18 of the Public Officer’s Ethics Act which bars public officers from knowingly giving false or misleading information.

“The governor must therefore take responsibility for the disposal of the hotel in a secretive and questionable manner,” notes the report obtained by the Sunday Nation on Saturday.

“He lacked truthfulness, good faith, transparency and credibility... he denied other parties who might have been interested the opportunity to bid for the hotel.

“Prof Ndung’u also misled public institutions and the general public regarding every facet of the hotel.”

The report was handed over to President Kibaki on November 24 last year, but it was never made public. In the report, the commission notes that although the Central Bank had five lawyers, three of whom were advocates of the High Court and working under Mr Abuga, none of them was involved in the transaction.

“Despite the fact that the bank also has a panel of about 25 external law firms that are many a time instructed to do its legal work, none of them was consulted. All legal issues pertaining to the sale of the hotel were handled by Mr Abuga personally,” says the report.

“A law firm was, however, instructed by CBK to handle the sale of the hotel, but the role of that firm ended up being so minimal that a lot of the work that it was supposed to do was taken over by Mr Abuga.”

The report says that it was Mr Abuga who followed documents for registration at the lands office, transported the hotel’s valuers in his private car and later in his official vehicle.

Says the report: “The extent of Mr Abuga’s personal involvement in the transaction went far beyond mere facilitation of the transaction... his presence at the lands office was meant to influence the speedy and secretive registration, given his rank at CBK.”

The report also says that he was happy to mislead the Kenya Anti-Corruption Commission that CBK was transferring the hotel to itself and approved and supported the filing in court of a registration of settlement whose terms he knew the bank would not honour.