Raila finally issues a statement on Grand Regency

[deyiengs]

Very interesting indeed

......" On April 23 this year I received a telephone call from the Governor of the Central Bank who told me that there was something he wished to share with me as Prime Minister, concerning adverse stories appearing in the media. I met him in my office the same evening." He said.

The PM says the Governor presented him with an eight-page, undated, unsigned, typed document which purported to give a background to the Central Bank's involvement with Kamlesh Pattni and the case of the Grand Regency hotel, in which the Bank had a charge over the land and buildings....

read more:
www.kbc.co.ke/story.asp?id=51101

[mimimzalendo]

Deyiengs

Ahsante for this.

Q- why would a whole educated and experienced Governor of CBK deal with "unsigned and undated" proposals/letters/notices/reports?

in professional circles, that is usually a front to perform or cover "conflict of interest" or corrupt activities.

an undated memo is a "test ballon" to see if the other side will cooperate and if not it removes all liability from you.

problem is- a meeting is a meeting. records are kept two ways. reports are stamped with presence of discussants.

but why im i not surprised? its become the norm. suspects and thieves are glorified.

[adongo23456]

This is Raila's full statement from the Nation website on a pdf format.

Statement by the Prime Minister, the Rt Hon Raila Odinga

July 8, 2008

The Grand Regency Hotel

With permission, Mr Speaker, Sir, I wish to make a statement about the controversy surrounding the sale of the Grand Regency Hotel.

I have decided to make my first Prime Ministerial statement on this subject to this House as Iam a fervent advocate and admirer of parliamentary democracy.

The media has a vital role to play, but on some subjects I did not wish to inform the people of Kenya what I knew, when I knew, and what I did through press conferences or paid advertisements.

This House occupies a central role in Kenyan politics. My loyalty is to the supremacy of this parliament rather than any individual.

This House has the power and responsibility to question how and when government decisions are made to ensure greater transparency and that highest standards of financial probity are
maintained. I value this immensely.

With these few opening remarks I wish to share the following sequence of events that will inform the members of my role as Prime Minister.

On April 23 this year I received a telephone call from the Governor of the Central Bank who told me that there was something he wished to share with me as Prime Minister, concerning
adverse stories appearing in the media. I met him in my office the same evening.

The Governor presented me with an eight-page, undated, unsigned, typed document which purported to give a background to the Central Bank’s involvement with Kamlesh Pattni and the case of the Grand Regency hotel, in which the Bank had a charge over the land and buildings. Mr Speaker, Sir, I will be placing this document and others in my possession in the Library of the House.

The document noted that the Bank had held a Board Meeting on April 7, 2008, to chart the way forward. It stated that the Libyan government was “very eager to have a foothold in the hotel industry” and that “consultations have been ongoing, at the highest levels of the two governments, where it has been agreed that Libyan investors be encouraged to purchase the Grand Regency hotel when the opportunity arises”. The investors had agreed to buy the hotel as a going concern and at market value.

The Governor told me a deal had in fact been concluded on 23rd April with the Libyan investors, who had paid 10 per cent of the purchase price of US$45 million but the deposit was not made until 8th May.

This was the narrative according to the Governor of the Central Bank.

The Finance Minister, on his part, told Parliament that the hotel had not been sold on 29th April. He informed the public that the hotel would be sold through public auction.

This was the rapid rebuttal from the Minister of Finance.

I then began reading in the media often contradictory statements. Because of this, on 25th April 25, two days after my meeting with the Governor of the Central Bank, I directed my Chief of Staff, to write to the Director-General of the Kenya Anti-Corruption Commission. In this letter, I requested information on or sight of:

· the status of the receivership accounts relating to the hotel;
· the status of pending civil suits filed by the Commission against Pattni and his codefendants;
· the surrender and transfer documents;
· the consent orders/extracted orders as might have been made;
· the counsel who advised on and prepared the transactional documents;
· the breakdown of the transaction costs;
· how the transaction had been or was being handled in the context of the Privatisation
Act; and
· all other relevant documents, including correspondence exchanged over the
transaction.

The letter was copied to the Attorney-General, to the Finance Minister and to the Governor of the Central Bank, and to Head of the Civil Service.

On June 12th I received a reply from the Director General of KACC confirming that the Grand Regency hotel had been recovered from Pattni’s Uhuru Highway Development Ltd and handed over to the Central Bank of Kenya.

Attached to the letter was a copy of the Court Order issued under Civil Suit No. 111 of 2003, instituted under the Kenya Anti-Corruption and Economic Crimes Act, showing that a
settlement had been reached between the Bank and Pattni regarding the handing-over of the Grand Regency in exchange for the Bank’s abandoning all claims against Pattni and all other
defendants in the case.

The KACC however did not furnish me with all the documents as per my request of 25th April. I was thus forwarded partial evidence but not the whole so I can make an informed assessment.

What precipitated my action to call the Cabinet Committee on Finance, Administration and Planning was that the Minister of Lands discovered that the transfer had been mysteriously effected on 25th June and made a press briefing to that effect on the same day. On 27th June the Finance Minister for the first time acknowledged that indeed the hotel had been sold. At the meeting held on 1st July the Cabinet Committee constituted a technical sub-committee with the mandate to collect and review all available documents and records relating to sale of the Grand Regency Hotel.

The Committee reported back on the evening of 1st July and by that time this House had carried the motion of “No Confidence” in the Minister of Finance.

The Committee’s deliberations, observations and findings compelled them to make recommendations that the Minister for Finance and others be directed to step aside until an in-depth investigation on the purported sale are carried out.

I am very pleased that the Minister of Finance has deemed it important to step aside. This is an honourable action for which I commend him.

Mr Speaker, Sir let me at this juncture say that the Government values Libyan investment and we have no quarrel with the Libyan government. In fact the Libyan investors are not only interested in hotel developments but have also expressed interest in refinery, pipeline and other infrastructural projects. I wish to assure the Libyan investors that the Government is committed to resolving the sale of Grand Regency hotel in a mutually agreeable manner.

As this crisis was raging on during the last two weeks I also heard that some of our development partners were considering withdrawing financial support and development assistance. The news headlines may have also deterred potential investors that Kenya is back in business as before where financial transparency and accountability are just meaningless words. Well my message to them is that this is the new Kenya where people regardless of
their status are accountable for their actions. Justice for all but not the chosen few remains our motto.

The establishment of good governance – i.e. the practice by political leadership of accountability, transparency, openness, predictability and the rule of the law – is widely accepted as a critical element in securing stable economic development for market oriented growth in our country. Governance is not necessarily limited to government in which all public affairs are conducted for instance in the economic sector.

Good governance depends on the extent to which a government is perceived and accepted by the general citizenry to be legitimate and responsive to the needs of the citizenry; competent in ensuring law and order and in delivery of public services; and equitable in its conduct, favouring no special interest or groups.

Achieving Good Governance and overcoming the practices of profligacy and corruption inherited from the past is one of the most important challenges facing the country and our government of Grand Coalition. But in facing this challenge we must not be shackled by the fear of being perceived to be corrupt in pursuing genuine opportunities to enhance our economic development.

[merkeju]

the question is how much is the hotel worth? is the 2.9 or was it 1:8 billion the worth best price for the hotel?
and where is that money?

[politicalmaniac]

AO
Great read from R eh?

1) How can the CBK Gov be so hoi-hae giving the PM undated unsigned document to peruse?
2) Arent there local investors who could have bought the Hotel?

so many questions!

[kamalet]

Raila's statement should have served to exonerate Kimunya but he too was smelling blood if you saw him in Parliament!

When the CBK governor informed the PM that the deal had been concluded for the sale of the hotel on 23rd April, he was certainly correct, but the sale could not have taken off without the deposit of the 10%.

Kimunya was perfectly correct to tell the House that 29th April, the hotel had not been sold since no agreement had been signed and no Stakeholder Amount (this is the 10% deposit) had been paid to the bank. The fact that the stakeholder amount had not been received could not be taken that the deal had been sealed. The sale actually happened when the parties signed the agreement on 5th May 2008 and the deposit paid.

Kimunya would have been in a worse of place if he had told the House that the hotel had been sold and yet no deposit had been paid on the 29th April.

From a factual point of view, the statement by the PM also contains certain inaccuracies. For instance in his statement, he alleges that the consent in HCCC 111 of 2003, the parties were the Bank and Pattni. Infact the correct position is that this suit was between KACC and Pattni and the bank has clearly said that the suit did not involve it as chargees to the hotel's assets!

The Lands Minister could not have precipitated the disclosure of a mysterious sale since the PM was aware of the deal as advised by the CBK. It is mischevious of the PM to suggest that the disclosures by bothe Finance and Lands ministries was the precursor to the forming of a cabinet sub-committee, as the issue had been blown over by the media and this was an effort at damage control.

The suggestion that some development partners wanted to withhold aid on this saga is certainly untrue. I have already suggested that the loud silence of these partners suggests that the deal is more political than factual. Previously, these partners have needed no prompting at getting involved at the whiff of a corrupt deal!

I need not belabour the point that the results of the media leak of the sub-committee chaired by Orengo as well as the report dealt a credibility problem for the PM. In the event that Kimunya is exonerated of any criminal involvement in the deal, you can bet there will be a backlash on some people.

Finally, I am totally amused at the instructions of the AG to the police to investigate the issue......

[mzee]

Jul 9, 2008 9:38:50 GMT 3 kamalet said:

Raila's statement should have served to exonerate Kimunya but he too was smelling blood if you saw him in Parliament!

When the CBK governor informed the PM that the deal had been concluded for the sale of the hotel on 23rd April, he was certainly correct, but the sale could not have taken off without the deposit of the 10%.

Kimunya was perfectly correct to tell the House that 29th April, the hotel had not been sold since no agreement had been signed and no Stakeholder Amount (this is the 10% deposit) had been paid to the bank. The fact that the stakeholder amount had not been received could not be taken that the deal had been sealed. The sale actually happened when the parties signed the agreement on 5th May 2008 and the deposit paid.

Kimunya would have been in a worse of place if he had told the House that the hotel had been sold and yet no deposit had been paid on the 29th April.

From a factual point of view, the statement by the PM also contains certain inaccuracies. For instance in his statement, he alleges that the consent in HCCC 111 of 2003, the parties were the Bank and Pattni. Infact the correct position is that this suit was between KACC and Pattni and the bank has clearly said that the suit did not involve it as chargees to the hotel's assets!

The Lands Minister could not have precipitated the disclosure of a mysterious sale since the PM was aware of the deal as advised by the CBK. It is mischevious of the PM to suggest that the disclosures by bothe Finance and Lands ministries was the precursor to the forming of a cabinet sub-committee, as the issue had been blown over by the media and this was an effort at damage control.

The suggestion that some development partners wanted to withhold aid on this saga is certainly untrue. I have already suggested that the loud silence of these partners suggests that the deal is more political than factual. Previously, these partners have needed no prompting at getting involved at the whiff of a corrupt deal!

I need not belabour the point that the results of the media leak of the sub-committee chaired by Orengo as well as the report dealt a credibility problem for the PM. In the event that Kimunya is exonerated of any criminal involvement in the deal, you can bet there will be a backlash on some people.

Finally, I am totally amused at the instructions of the AG to the police to investigate the issue......

If the above were true and the PM was indeed fabricating stuff then Kimunya would have been better placed to know this than anyone else. He could have refused to stand down. Kibaki would have refused to fire him. Remember this is not a PM "story" as you want to insinuate. There was a committee set by the PM to investigate the matter. It did a good job is matter of hours as opposed to some useless commissions we have seen in the past and which Kimunya was hoping for. As the PM said, this is a new Kenya. Tribal "attorneys" must stop the nonsense of defending robbers. By the way, its the same you (Kamale) who told us that due to the "leak" Kibaki was not going to do anything. Truth is that the leak did more damage to Kibaki than it will ever the PM. Why try defend a broad day light thief anyway? But who am I to contradict you?

[kamalet]

Mzee

FYI, all I did was take Raila's statement to Parliament and test it against all the statements previously made by Kimunya, the Leaked report and I came up with the conclusions I did. Perhaps it is these you should have challenged, rather than lamely defend Raila.

[adongo23456]

Kamale

As I have said in the other thread Kimunya promised Kenyans and M.P's on April 29th that the hotel will be sold in a public bid according to Kenyan laws when he knew very well that the hotel had actually been sold on April 23rd and there was no public bid. To twist it around that oh he was waiting for the 10% deposit is not going to help your boy. Kimunya should have told parliament that yes they had sold the hotel but the deal had not been finalized. You and and me know very well why he couldn't do that. It is because they had broken the law by single sourcing the sale and worse still to a pre-arranged customer on some shady M.O.U between Kibaki and Gaddafi.

Kimunya working in cahoots with Njuguna Ndung'u of CBK and Mr. Gichangi the NSIS chief broke the law as far as privatization procedures are concerned. Their only argument is that the Grand Hotel was not a public property and that the CBK had a right to sell it whichever way they chose as long as they recovered money owed to them.

That argument is mute by the mere fact that the KACC ( a government agency) held a massive press conference announcing the recovery of GRH from the super thief Pattni and reverting it to the Kenyan government under the trusteeship of the CBK which was directly owed money by Pattni. From that moment on the GRH became public property held in trust by the CBK.

The best procedure would have been for the CBK to transfer the property to the Treasury with instructions to the Treasury to dispose off the property to help recover monies owed to the CBK. Alternatively VBK could sell the hotel as long as they followed the privatisation procedures. At any rate there was no guarantee that the hotel was going to fetch the Kshs 2.5 billion or whatever was owed to the CBK, unless there were some pre-determined deals. It could have been sold for Kshs 1 billion or for Kshs 10 billion.

If the hotel was sold for more than the amount owed to the CBK, the Treasury would have to give the CBK whatever is owed to them so they can revert it to the right account and the rest would be held by the Treasury since Kamlesh had surrendered the hotel in exchange for all charges against him which in monetary value runs into more than 100 billion as Job explained here in another thread.

adongo

[kamalet]

Jul 9, 2008 15:30:41 GMT 3 adongo23456 said:

Kamale

As I have said in the other thread Kimunya promised Kenyans and M.P's on April 29th that the hotel will be sold in a public bid according to Kenyan laws when he knew very well that the hotel had actually been sold on April 23rd and there was no public bid. To twist it around that oh he was waiting for the 10% deposit is not going to help your boy. Kimunya should have told parliament that yes they had sold the hotel but the deal had not been finalized. You and and me know very well why he couldn't do that. It is because they had broken the law by single sourcing the sale and worse still to a pre-arranged customer on some shady M.O.U between Kibaki and Gaddafi.

Kimunya working in cahoots with Njuguna Ndung'u of CBK and Mr. Gichangi the NSIS chief broke the law as far as privatization procedures are concerned. Their only argument is that the Grand Hotel was not a public property and that the CBK had a right to sell it whichever way they chose as long as they recovered money owed to them.

That argument is mute by the mere fact that the KACC ( a government agency) held a massive press conference announcing the recovery of GRH from the super thief Pattni and reverting it to the Kenyan government under the trusteeship of the CBK which was directly owed money by Pattni. From that moment on the GRH became public property held in trust by the CBK.

The best procedure would have been for the CBK to transfer the property to the Treasury with instructions to the Treasury to dispose off the property to help recover monies owed to the CBK. There was no guarantee that the hotel was going to fetch the Kshs 2.5 billion or whatever was owed to the CBK, unless there were some pre-determined deals. It could have been sold for Kshs 1 billion or for Kshs 10 billion.

If the hotel was sold for more than the amount owed to the CBK, the Treasury would have to give the CBK whatever is owed to them so they can revert it to the right account and the rest would be held by the Treasury since Kamlesh had surrendered the hotel in exchange for all charges against him which in monetary value runs into more than 100 billion as Job explained here in another thread.

adongo

Adongo,

I think we could go round and round in circles over this and still not get anywhere. The lie being pushed about selling the hotel through the Privatisation process is wrong!! Wrong!!

Perhaps many people argue out of ignorance, but I have had the opportunity to see the sale agreement and a copy of the charge on the property. The charge is very clear on how the property was to be disposed off in the event of a default. The Bank has correctly said that it was not a trustee of the public interest in this deal but rather a chargee - two very different animals.

We can twist it all we want, but unless you have read the charge, you cannot argue about the disposal process!

[adongo23456]

Kamale

This is not rocket science. Kamlesh returned the property through the efforts of KACC which is an agency set up to recover stolen assets or those purchased through the proceeds of stolen public money. They (KACC) recovered the hotel. CBK had every right to get what is owed to them on the basis of the charge they placed on the hotel. What CBK does not have the right to do is to behave as if GRH became their private investment proceeds to do whatever they wanted.

This is not a "default" as you seem to suggest. This is a recovery of property that once recovered belongs to the public. Normal bank charges on property are not facilitated through state agencies like KACC. They are private arrangements between the defaulting company and the bank.

Kamlesh did not default on the loan from CBK. Kamlesh stole more than 100 billion from the Kenyan taxpayer including from CBK and if the KACC could recover any of that it belongs to Kenyans and CBK can take their share since they were involved in this particular hotel. If this was a normal charge on the hotel the CBK should be refunding Kamlesh about Kshs 400,000. Why are they not doing that?

adongo

[kamalet]

Adongo,

On my way out of this debate, perhaps you can try and acquaint yourself with how the Central Bank came to have the property charged in its favour. Until you understand how this came to be, including the involvement of KACC, and not the abstract view of theft that you hold, then you can stand and argue about this deal not being rocket science, for indeed it is not!!!

[mimimzalendo]

Adongo, Job

Do you notice that the PNUistans are not even addressing a salient question:

why did Kimunya plot the bypassing of Orengo's office and sought to register the sale of GRH in secret using officials in Orengo's ministry who comes from his home province

[mimimzalendo]

What is known is simple:

Kimunya in last week of April faced a Bunge question which asked him if GRH was sold and how it was.

Kimunya (on the Hansard record) replied that it was not sold, has never been considered for sale yet and if it was it will follow the same channels.

What we know now is that actually the hotel was already sold by then and a deposit (a proof of sale) had been paid.

Job/Adongo- aproperty that is already sold/in process of waiting to be sold is removed from active properties and put as "under contract or sale in progress or docs registered". why did kimunya not choose to say those words and instead said - not sold?

semantics mingi from MKM mafia and its appendages fools nobody. we sniff through the teeths the words come from.

[politicalmaniac]

Jul 9, 2008 16:40:26 GMT 3 @mimimzalendo said:

What is known is simple:

Kimunya in last week of April faced a Bunge question which asked him if GRH was sold and how it was.

Kimunya (on the Hansard record) replied that it was not sold, has never been considered for sale yet and if it was it will follow the same channels.

What we know now is that actually the hotel was already sold by then and a deposit (a proof of sale) had been paid.

Job/Adongo- aproperty that is already sold/in process of waiting to be sold is removed from active properties and put as "under contract or sale in progress or docs registered". why did kimunya not choose to say those words and instead said - not sold?

semantics mingi from MKM mafia and its appendages fools nobody. we sniff through the teeths the words come from.

But they have no shame! No sense of remorse
Ni Wezi tu!
Disgusting specimens of humanity

[job]

Mimimzalendo,

Well said.....the land transfer process was deliberately done through a fraudulent process which involved - hiding it from the Minister, intimidating and threatening junior staff, bypassing proceedures and timelines, failure to pay stamp duty, presenting documents with hand forged/altered sales price (with no endorsement signatures) ....etc etc........THAT CANNOT BE CLEANED my friend. IT WILL BE PUNISHED. Sadly, even junior lands officers will face the music.

Kimunya's greatest undoing are his contradictory & misleading words (both to the public and to his parliamentary colleagues)...all which suggest deceipt, fraud and corruption.

No one should forget Kimunya's (& CBK Governor's) deliberate ATTEMPTS at hiding of the deal from the Attorney General - who insists that the ONLY LAWFUL process the GRH would have been disposed off through, was by the Public Procurement & Privatization Act, PERIOD!


When faced with the dilemma of selling GRH by private treaty or public auction, what do you do respectively as either Finance Minister or CBK Governor?

If you are the CBK Governor, you consult with;

- the Finance Minister.
- the CBK board
- the Attorney General (esp. to clear any Pattni case matters) &
- the Director of KACC given the complex circumstances of GRH vis a viz Pattni's cases.

just writing a few letters, period.

Ndung'u only felt it wise to consult the Finance Minister and the KACC Director, DELIBERATELY ignoring both the CBK board and the Attorney General. That was no coincidence.

The AG and some members of CBK board were not meant to know this.

Worse, of those two people he consulted, the KACC Director (Ringera) advised him not to dispose via private treaty...but follow the public procurement & privatization laws....an advise he promptly IGNORED.

Then the Governor goes ahead and disposes GRH via PRIVATE TREATY to A NO-BID, PREDETERMINED BUYER, introduced to him in person by the NSIS director.......WITHOUT INVOLVING THE CBK BOARD!

EVEN IF YOU ARE the BLUE-EYED SON OF IMPUNITY, HOW DO YOU ESCAPE THAT?

This is hard-headed IMPUNITY which must be PUNISHED. Ndung'u will soon realize the seriousness of his ommissions and commissions.


Then if you are FINANCE MINISTER what do you do when faced with the same dilemma of either disposing by private treaty or public auction?

the least you can do is to consult with;

- the ATTORNEY GENERAL
- the KACC director (due to GRH's linkage to Pattni)
- the CBK Governor and Board

and most probably the consensus would have been SIMPLE - TO SELL VIA PUBLIC ASSETS DISPOSAL LAWS of privatization & procurement.

KIMUNYA would not be in trouble if he did that.

But the trouble is that it seems ...Kimunya and Ndung'u having been given a 'special' buyer by Gichangi,....whose offer was probably below market value.....(who knows how lucrative his palm-greasing offer)...... were determined to FORCE & NAVIGATE a path.....that bypasses the written privatization laws........seeking alternative loopholes......disguised under CBK's commercial role as a bank........trying to preempt and overcome legal landmines.

They sought to establish flimsy justifications,.....involve only officials likely to comply,....while avoiding those likely to RAISE HOME TRUTHS......going to the extent of misleading a nosy parliament that somehow got whiff of what was going on.........KIMUNYA LIED TO PARLIAMENT in the process......only to eat words later with CONTRADICTORY and ALARMING STATEMENTS.......

Why would Kimunya go through all these risks and minefields?

Was something too sweet in the process, worthy ALL these risks? Be the judge.

After all Kamale tells us Kimunya has been involved in worse (or is it sweeter) deals bigger than the GRH scam, that warrant his sacking more than this.

But even in the GRH scam, EVEN IF YOU ARE PRINCE OF IMPUNITY, HOW DO YOU ESCAPE THAT?


Then comes the gun totting sheriff-cum-cowboy. The NSIS Director will regret why he camped at Ardhi House with his hardware threatening civil servants.....in the process INVOKING THE PRESIDENT'S NAME........bullying the LANDS COMMISSIONER & REGISTRAR OF TITLES...... and meddling in government duties that he's not authorized to handle.

EVEN COPS of IMPUNITY CAN'T ESCAPE THAT. IT'S JUST A MATTER OF TIME.

[deyiengs]

Jul 9, 2008 9:38:50 GMT 3 kamalet said:

Finally, I am totally amused at the instructions of the AG to the police to investigate the issue......

;D ;D ;D ;D That's the son of a CEO talking. Typical PANUist. You need to address every questions, stop ducking! Don't waste time writting selectively.

[atis]

Oh, all this time I thought it was the Libyan connection whom informed Raila co. Seems there's abit of cleanliness in the CBK, bravo to the CBK Governer.

I don't know what some people are yappering on about but clearly there was a private sell on the 23rd of April before the bid which should not have happened.

When you agree to buy a property, the property is 'under contract' and considered sold because the vendor's agent will stop advertising and refuse other offers, but the vendors are not going to demand you pay a 10% deposit immediately.

The vendor's agent sends the contracts to your bank manager and your lawyer/s. The lawyer then sends an expert/s to inspect the property for a report where they make some alterations on the contract, adding conditions, settlement timeframes and what have you.

In this case the vendor would've been the CBK.

This can take a week to a month before the actual settlement takes place, after this you have the exchange of contracts where you pay the 10% deposit to lock in the contracts, this is followed by a cooling off period, then another couple months where the lawyers do a thorough research of the property and during this time any party can pull out.

If we are hitting July and the sale was made in April, that'll be heading towards the end of the settlement period, there is a possibility the govt could seize back the asset depending on how much the buyers are willing to hold onto it.

In this case I am pretty certain this was not a legitimate sell and I don't think the Libyans will be that keen to hold onto it.

[mzee]

atis,

I refer you to Adongos post. Specifically to the paragraph which he writes;

"Kimunya working in cahoots with Njuguna Ndung'u of CBK and Mr. Gichangi the NSIS chief broke the law as far as privatization procedures are concerned. Their only argument is that the Grand Hotel was not a public property and that the CBK had a right to sell it whichever way they chose as long as they recovered money owed to them."

The key words are ----broke the law as far as privatization procedures---.

If Kimunya had not flouted the above procedure we would not be having this debate. Please prove to me that he did not do so bila kumangamanga or as Gen Kegs would say kuregarega--whatever that means.

[adongo23456]

Kamale & Others

This surely puts your argument about "public property or no public property" to rest.

With Kimunya gone, more officials should follow example

Story by PAUL M. MWANGI
Publication Date: 7/10/2008

Clearly, Finance minister Amos Kimunya is not the only one that should step aside to pave the way for investigations into the controversial sale of the Grand Regency Hotel.

Among the people he said should also step aside are Central Bank of Kenya officers, including governor Njuguna Ndung’u and Attorney–General Amos Wako. I agree with him.

It would appear that the CBK officials and the AG should shoulder greater blame over the sale. This does not mean that Mr Kimunya did not do wrong.

He remains blameworthy for having failed to ensure that the Privatisation Act was followed. It seems, however, that he also acted on bad legal advice from the Public Procurement Oversight Authority, CBK and the AG.

Last week, the Central Bank placed advertisements explaining the legal position on which the bank acted. With respect to the governor who signed it, the legal reasoning is so untrue it verges on the fraudulent.

First, the governor says that Central Bank did not sign the consent and that the consent could not vest any legal right to the bank. But Kamlesh Pattni unconditionally gave the hotel to CBK.

Sign transfer

His action was so unequivocal that he even agreed to sign all necessary transfer documents so that the hotel can vest in CBK.

He went further to agree that if he doesn’t sign the documents, the deputy registrar of the High Court may sign them on his behalf.

So why would CBK want to argue against a consent that grants it the hotel? Why would it not forward the transfer to Pattni to execute, and if he failed, to forward it to the High Court for the deputy registrar? Why would it keep insisting that the hotel does not belong to it?

I believe it is because CBK was aware that the effect of Pattni’s transfer of the hotel to it immediately turned Grand Regency Hotel into public property. Once that happened, the provisions of the Privatisation Act applied to the hotel.

It is for this reason that the Kenya Anti-Corruption Commission wrote to the bank on April 22 informing it that the bank could only sell the hotel in the manner prescribed by the law.

But CBK was determined to sell the hotel by private treaty and therefore continued to insist on the false legal position that it did not own the hotel because the law prohibits it from engaging in commercial activities.

Once it is established that Pattni had divested himself from ownership of the hotel and had transferred it to CBK, then everything else CBK did after that was fraudulent.

For instance, it was fraudulent for the bank to claim that it was exercising its statutory power of sale under the charge.

After the hotel was transferred to CBK, it continued to maintain a charge over its own property and eventually the bank auctioned itself. All this was done as the bank consistently refused to accept the correct legal position taken by KACC.

If the bank could proceed to sell the property by exercising its statutory power of sale, why hadn’t it done so before? This charge had been registered in 1993 and the bank had been unable to act on it.

Clearly then, something changed that enabled the bank to sell the hotel this year. And what changed is that Pattni agreed to withdraw his objections and give the hotel to CBK to do as it wished.

If Pattni was now cooperating, how can the bank pretend that it was taking the hostile action of exercising its statutory power of sale against him?

The bank, in any event, still failed to act diligently in the way it chose to proceed. It sold the land and buildings for Sh1.85 billion and the plant and machinery for Sh1.1 billion.

But how much was the business itself sold for? CBK says that the hotel was sold as “a going concern” to secure the jobs of the 400 workers yet there is no price placed on the value of the hotel as a business.

The Grand Regency is one of the top class hotels in Kenya. Some opinions say it is more than “Five Star” in its grading. It has been operational for close to 20 years.

It has a clientele that pays a premium to use its facilities. That is worth something. CBK did not seek to be paid for the goodwill. Why?

The second set of questions regarding the sale needs to be answered by the Attorney-General. According to the consent signed by KACC, the commission was acting under section 56B of the Anti-Corruption and Economic Crimes Act.

On its website, KACC says that its opportunity came when section 56B was added to the Act by the Statute Law (Miscellaneous Amendment) Act 2007.

This section was to provide KACC power to enter into recovery negotiations with persons suspected of corruption. Under this section, KACC can accept the return of property from a suspect in return for the settlement of civil claims against that person.

The commission can also give a criminal amnesty to a suspect in return for a civil settlement.

But when one goes back to the history of section 56B, it appears that it never became law. First, this section had been proposed by the Statute Law Miscellaneous Amendment Bill that was published by the Attorney-General.

The Hansard shows that the Bill came up for debate on September 13, 2007, under the chairmanship of Mr Kirugi M’Mukindia.

MP Cheboi moved a motion on that day in which he urged the House to delete the proposed section 56B. He argued that there should be no option for commencing civil recovery proceedings without criminal investigations.

Cabinet minister Martha Karua objected and supported the Attorney-General in the proposal that the section be passed. The Hansard says that the matter was put to the House and it reports: “The proposed Section 56B deleted.”

When the Act went to the President for his assent, he rejected to assent to the Act because of among other things the blanket amnesty it was proposing to give.

The President asked the section on amnesty be removed. But he argued for section 56A which had also been rejected by the House and deleted. This section had sought to give KACC power to appoint a receiver over the property of a suspect.

The President however never argued for section 56B and was in agreement with Parliament that it remains deleted.

Hansard shows that the President‘s recommendations went to the House for debate on October 4, 2007. The amnesty clause was removed and section 56A reinstated.

Section 56B remained deleted. But when the AG published the Act and commenced it on October 15, 2007, section 56B was part of our laws. Why?

Corruption cases

How did this happen? When did it happen? Is it possible that we have a section of our laws which Parliament had rejected now being used to settle corruption cases?

How is it that the AG published into law something expressly rejected by Parliament? And how come the Ministry of Justice and Constitutional Affairs has never realised this problem and advised the Cabinet accordingly?

When the Section 56B was rejected by the House on September 13, 2007, Mr Justice Aaron Ringera issued a statement against the action of the House.

He therefore knew on September 13 that this section was not part of our laws. How then could he use the same deleted section to enter into a consent with Pattni?

At what point does Mr Justice Ringera believe section 56B found its was back to our laws?

Mr Kimunya is justified to feel that everyone wants to quickly get rid of him. It is because his continued counter-attack is revealing new and embarrassing mistakes committed by other officials. Many more people have a case to answer over this saga.

--------------------------------------------------------------------------------------------------

Folks,

Apart from trying to cut some slack for Kimunya, which is fine, this guy is saying the CBK could not hold a charge against a property it already owned after the transfer. No bank can put a charge against its own property. This should end the debate as to whether GRH hotel became a public property after the transfer from Pattni or not. It did and those who sold it or otherwise approved or supervised the sale broke the law period.

adongo

[job]

Adongo,

and the other elephant he is talking about is...

The FRAUDULENT PUBLISHING of the ANTI CORRUPTION AND ECONOMIC CRIMES ACT.

While this law above was being debated / legislated some time last year, THREE MUSKETEERS - RINGERA, WAKO AND KARUA - proposed for inclusion, a clause (SECTION 56 B) - otherwise known as the AMNESTY PROVISION - which would have allowed KACC to accept the return of property from corruption suspects in return for the settlement of civil claims against the suspect.

KACC would have also been given the authority to grant criminal amnesty to a suspect in return for a civil settlement.

Meaning that - with this section in the law- you could steal 30 billion from treasury then quickly negotiate a settlement with KACC to pay back 15 billion and be granted amnesty against any civil or criminal prosecution. You would be sh 15 billion richer, and as clean and free from prosecution as an angel.

Every right thinking Kenyan knows this loophole would have ironically been the new avenue for corruption. Thus responsible MPs SPECIFICALLY REJECTED & DELETED that amnesty provision (section 56 B) appropriately.

The MPs also knew the provision was going to be abused by KACC - to extort from corruption suspects then shield them from prosecution, and shield them from REAL RESTITUTION of stolen assets.

now comes the elephant

When Wako & Karua published the law, THE DELETED AMNESTY SECTION (56B) was somehow included in the FINAL PUBLISHED ACT.

HOW IT GOT SNEAKED BACK INTO THE LAW - AFTER BEING REJECTED IN THE HOUSE FLOOR - IS THE ELEPHANT I'M TALKING ABOUT.

HOW THIS HAPPENED REMAINS A MYSTERY.

This same deleted section of law (amnesty provision) was ACTUALLY what KACC & RINGERA used to negotiate with PATTNI, in exchange for the GRAND REGENCY.

AND now PATTNI expects all cases against (civil and criminal) him dropped.

Sarah Elderkin and Athman recently outlined in the Standard - all the numerous cases against Pattni covering his sh 158 billion worth exchequer-looting sojourn.

DO YOU SEE HOW THIS GETS THICKER.

BY THE END OF IT,.............IF A GENUINE ATTEMPT TO GET TO ITS BOTTOM IS MADE.......MANY MANY PEOPLE WILL FALL........NOT JUST;

NSIS DIRECTOR - GICHANGI
CBK GOVERNOR - NDUNGU
CBK LEGAL HEAD -KAUNDA
LANDS OFFICIALS
CHIEF ACCOUNTING OFFICER MIN. OF FINANCE - PS KINYUA

BUT ALSO

KACC DIRECTOR -RINGERA
KACC ASST. DIR - SICHALE
ATTORNEY GENERAL - WAKO

& OTHERS

[adongo23456]

Job

Thanks a lot. I had not fully digested the significance of that part of Mr. Mwangi's argument. And yes, that is a humongous elephant in the house. I mean these folks actually sneaked in a clause rejected in parliament and by Kibaki himself and surreptitiously added it after the fact and got Kibaki to sign it and now it is supposed to be part of the laws of Kenya? Hell No. That is a complete battle front by itself.

My fear though is that we are going to have all these fake "investigations", "Commissions of Inquiry" etc and they will just gloss over things. For example Wako has ordered the police to investigate a few people. It sounds good and I know you supported it. What happens if Wako is also involved in some of the stuff?

The AG can order investigations and demand answers from the police on crimes of these magnitude where there are no individual complainants to report to the police but we have a mixed bag here. Same with Martha Karua. Now she is kind of trying to distance herself from Kimunya and co but her hand is fully in the other cookie jar(s) of impunity and now we know she must have helped sneak in that clause back. Obviously the country cannot look up to her for help.

I think parliament is going to be critical in pushing forward this agenda and the PM's office may very well be the battering ram to open some of these doors. It is going to be a tough battle but I think the nation is ready for it.

adongo

[job]

exactly. It is going to be a huge problem....even retracing the path of that illegal action.


As for Wako's investigations (the AG is still the path towards prosecutions)- that's the viable and prudent avenue towards convicting some of these thieves. Why waste time? Within 30 days, the police should present files to Wako for his determination on who's file has sufficient evidence for prosecution. That can be a step forward.

Coming as soon after the AG has himself recommended (in the technical committee) that certain people resign (at CBK, NSIS & Treasury)....it would only be logical to follow up with SUBSTANTIVE investigations, sufficient for prosecuting these thieves.


Any other inquires, commissions etc formed by the president dont lead to prosecutions. They can only do what Raila's technical commitee did - that is RECOMMEND STEPS OF ACTION.

The best they can get - is recommending PROSECUTION.

But since most of their outcome are never even released to the public..who knows what they might recommend.

But as you see, there are bigger problems for most of these actors.

I've noticed too that Kimunya may have flouted the same privatization laws when signing another contract with the Libyans for ownership of the Mombasa oil refinery.

it seems a can of worms has been opened and we could be bracing for numerous querries.

[Daktari wa makazi]

The GRH was sold as a business ( going concern), property ( fitting and fixtures) and land. It therefore three separate contracts negotiated, which would constitute individual agreements, including insurance of undertakings. What was signed was a memorandum of sale - which would include all the elements of the different contracts in play. It was that memorandum which would then be used to change title, deeds, registration (company) and so on.

This was more than some sale of a house which Kamalet and friends think it was. A payment of a deposit would therefore not significantly alter any positions. The deal was sealed on signing the memorandum and any eventuality was covered by insurance

Mwangi's article shade light on important issues which I knew nothing about, especially the fact that section 56B of the Anti Corruption and Economic Crimes Act is illegally enacted.

1. Kamalet argument of a charge by the CBK falls by the road. I had told him before that a charge being a civil action was overtaken by the criminal prosecution by the KACC meaning the Hotel went to KACC as a recovered asset. Now Mwangi confirms that position with more evidence.

Mwangi writes,

" Once it is established that Pattni had divested himself from ownership of the hotel and had transferred it to CBK, then everything else CBK did after that was fraudulent.

For instance, it was fraudulent for the bank to claim that it was exercising its statutory power of sale under the charge.

After the hotel was transferred to CBK, it continued to maintain a charge over its own property and eventually the bank auctioned itself. All this was done as the bank consistently refused to accept the correct legal position taken by KACC. "

2. The amnesty granted to Pa ttni is null and void because
-section 56B of the Anti Corruption and Economic Crimes Act was illegally enacted.

Adongo

I agree with Job. I think the best option is seek a police investigation and if people are implicated - a prosecution should follow. I agree with you that commission and extra judicial investigation will not directly address the issues at hand. Kimunya must now be investigated by the Police - and he must be arraigned in Court as quickly as possible so that he could be cleared if he is innocent. Boardroom clearance is not the answer. The second advantage to prosecution is that if any names prop up during the due process then those names must also be investigated with a view to prosecute. That saves us from the probelm associated with commission and investigation where the investiagtor's names surfaces during investigations forcing another investigation which eventually only recommends, as Job explained. That I think is the only viable solution here.

As for the section 56B - the AG must be asked to challenge the Act in Court who will in turn declare the Act enacted illegally and throw it through the window. Parliament will then have to enact it afresh. I donot think Parliamnet can recall Act which it has already passed. You will remember the Court declared the first anti-corruption Act illegal leading to the current one.

[merkeju]

wow,this people are evil they know where to steal and cover their tracks behind the law they sneaked in,they make laws that fit their actions and we are still letting them stay in the office.