MPs ordered to probe hotel saga
2008-07-01 13:05
Nairobi - Kenyan activists called three days of protests from Tuesday and Prime Minister Raila Odinga summoned cabinet colleagues to probe the secretive sale of a luxury hotel at what critics said was a knockdown price.
The sale of the Grand Regency had stoked national outrage and fuelled tensions in an already fragile coalition government, set up in April to end a bloody post-election crisis. Finance Minister Amos Kimunya faced calls to resign.
The deal involving Libyan investors had also added to suspicions of continued large-scale corruption after a series of scandals in east Africa's biggest economy - which some foreign businesses cited as a major deterrent to investment.
The Regency saga had pitted mainly ministers from Odinga's Orange Democratic Movement against Kimunya, a loyal ally of President Mwai Kibaki. Kimunya had been finance minister for most of the period since 2003, a time of strong growth.
Deal 'above-board'
Civil society groups called three days of protests and scheduled a march with legislators to the Regency, in central Nairobi, on Tuesday afternoon.
Reversing prior remarks the government-owned hotel had not been sold, Kimunya said last week it had gone for 2.9 billion shillings ($45m) after an offer "too sweet" to refuse.
That price, far less than the 4 billion shillings of a 1994 sale price for the hotel, which analysts valued at between 4.5 and 6 billion, provoked outrage around Kenya, including from some of Kimunya's cabinet colleagues and anti-graft watchdogs.
The minister said the deal was above-board and fetched the best possible price for the nation.
Late on Monday, cabinet colleague and Lands Minister James Orengo produced transaction documents that he said showed the hotel had in fact been sold for just 1.85 billion shillings.
'Finance minister must be removed!'
Orengo said Central Bank governor Njuguna Ndung'u had signed the agreement, and the hotel had gone to a company known as "Libyan African Pan African Investment Company Kenya Limited" with both Libyan and Kenyan directors.
"Finance Minister Amos Kimunya must be removed from that ministry immediately before he does any further damage," local economist Robert Shaw wrote in the Daily Nation.
"And if Prof Njugunfor a Ndung'u is reading the tealeaves, he would be well advised to call it a day too." Kimunya defenders said there was a witch-hunt on.
But Justice Minister Martha Karua, despite being another stalwart of President Kibaki, has also criticised the finance minister.
Kibaki and Odinga were at bitter loggerheads for the first two months of 2008, after Odinga accused Kibaki of stealing the December presidential election through fraud.
But via international mediation, they buried their differences to form a coalition government that had brought peace back to Kenya. Odinga called a meeting of cabinet's finance committee on Tuesday to discuss the Regency affair.