Could hotel scandal threaten Kenya’s government?

July 3, 2008

Grand Regency hotelKenya’s parliament and critics are calling loudly for Finance Minister Amos Kimunya to be fired for his role in the secretive government sale of a luxury hotel under murky circumstances. Pressure is mounting for Kimunya to resign or for his political patron, President Mwai Kibaki, to fire him over the sale of the Grand Regency hotel to a company that includes Libyan investors and at least one senior Kenya Central Bank employee.

The matter has tested the government set up in a power-sharing deal to end a bloody post election crisis

Kimunya denies wrongdoing and says the price offered was too good to resist. Political opponents and others have said that the value was drastically low, but straight answers about who bought it, how the deal came about and who is benefiting have not been forthcoming or given when asked for by the public or the press.

It hasn’t helped Kimunya’s situation that the Grand Regency first came to public scorn in the early 1990s when the man at the heart of the country’s longest running corruption scandal bought it with what the government says was stolen Central Bank money. That scandal, the Goldenberg affair, nearly brought the country’s economy to its knees and became the symbol for most in the east African nation of the impunity with which politicians and a small politically connected elite can steal public assets.
Finance Minister Amos Kimunya
Adding to Kenyan frustration is the fact that many of the players from that era are still active in politics or remain in the small club of the connected. For example, the lawyer who handled the sale of the Grand Regency in 1994 to accused Goldenberg architect Kamlesh Pattni is now a government minister and is on the commission investigating the new case. Also on that commission is Justice Aaron Ringera, who earns 2.5 million Kenya shillings ($37,820) per month in his job as the head of the Kenya Anti-Corruption Commission — and Kimunya was on the panel that awarded Ringera that job.

So with so many close connections among the relatively small political elite, so much official obfuscation and a poisonous political atmosphere, will Kenya’s taxpayers ever get a straight answer on how the deal came about or how they will benefit? Will — or should — anyone be punished for what is shaping up to be the latest Kenyan corruption scandal?

And what could it mean for the coalition?


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Ideally, all who are involved or benefited from the sale that is turning out to be another scandal should be brought to book. Whether this will happen or not remains to be seen. Why? Like the post said, they are all politically connected and as a result even those in the probe comittees compromised. How can they be impartial if connected to those in Kenya’s corridors of power?
Senseless. Don’t think all the noise will bear much fruit and neither will the probe comittees.

Posted by Deeznia | Report as abusive

Lets put this into the right perspective. The luxury hotel was recovered by the Central Bank of Kenya under the amnesty for returning proceeds of corruption act from the perperator of the so called “Goldenberg scandal” in consideration for immunity. The Kenya government needs money NOW to as the economy was brought to its knees after the Post election violence and it is expected that there will be a shortfall in tax collection this year. Plus additional funds for settling the internal displaced and oversised Grand Coalition government. The government through the finance minister Mr Amos Kimunya had to find ways to fund this deficit, hence the sale of saleable non-strategic assets.

As concerns the valuation in my opinion is fair considering the downgrading due to political uncertainity in the country. Its a high risk country. The higher valuations could have been possible if the country had no post election violence.

The differential amounts are due to the deal being done in US dollar hence subject to currency fluctuations between the time of signing the agreement and the time of receiving the money. The Kenya shilling streghtened against the dollar, not that the lower Kenya Shillings amount received was due to corruption.

The minister is a scrapegoat for the sins of the entire nation, who’s main past time is grandstanding, hypocrisy and greed. Mr Amos Kimunya acted in the best interest of the nation in selling to a willing party with the cash.

There are vested interests at play the main ones being;
1) Taxing of MP’s Allowances hence the fury of Kenya’s parliamentrians across the political divide.
2) The Kibaki succession in Central Kenya (Amos Kimunya was in my opinion the best potential candidate)
3) The ODM side wishing to discredit the PNU side. (If the Prime Minister had been briefed on the deal and If he had any integrity he should have told Hon Kimunya to follow the law in selling the hotel, not demanded answers in public after the deal)
4) The buyers were Libyans hence this unsettles vested interests in certain quaters.

Posted by Mohamed Ebrahim | Report as abusive

Now one can see why PM Raila Odinga did not want to be a part of Government of National Unity and be yoked together with the corrupt old guard. The whole idea of a GNU is nonsense, if President Kibaki was judged capable of forming his own administration and ruled Kenya what right does he have to say Raila Odinga can not do the same? The people of Kenya, by voting for Raila Odinga, clearly thought him a better leader than Kibaki.

It must be really frustrating for PM Raila Odinga that key ministries like finance are held by others over whom he has no control. I am sure he had his own vision and plans but now finds he is being held back!

Posted by Wilbert Mukori | Report as abusive