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Kenyan hotel sale is 'clean'
08/07/2008 09:41 - (SA)
Nairobi - The sale of a luxury Kenyan hotel to a company reported to be Libyan, which had sparked national outrage, was clean and the government was aware of it, Libyan officials told Kenyan television on Monday.
"I want to affirm that this deal was very clean and everybody in the Kenyan government knew about this," Libya's ambassador to Kenya, Hesham Ali Shariff, told Kenya Television Network (KTN).
The sale of Nairobi's Grand Regency hotel to a company called Libyan Arab African Investment Kenya Limited (LAAIKL), sparked a row that resulted in parliament carrying a vote of no-confidence in Kenyan Finance Minister Amos Kimunya last week.
Kimunya was accused of breaking Kenyan laws in the sale of the hotel that had been at the centre of a corruption scandal for 15 years.
Finance minister refuses to resign
Lands Minister James Orengo tabled documents indicating that the hotel was sold for 1.8 billion shillings ($28m) but Kimunya maintained during his defence in parliament that it was sold for 2.95 billion shillings ($45m).
The minister had refused to resign, but parliament insisted that it would not accept Kimunya handling government business on the floor. Under Kenyan law, President Mwai Kibaki was the only one allowed to fire the minister if he refused to resign.
Although critics said LAAIKL had dubious ties with Libya, Shariff said the company was the Kenyan chapter of the Tripoli government's Libya African Investment Portfolio, a company that ran 23 hotels in more than 15 African countries.
"This company is a government company and we bought Grand Recency Hotel and we transferred the money from the Libyan government to the Central Bank of Kenya," he added.
Fragile coalition government
In another statement carried by the Nation television, the Libyan portfolio said the deal had no hidden motive in the transaction.
"We would like to make it clear to the people of Kenya, all MPs and the government of Kenya that all our investments are people and environment friendly, free of any ulterior motives and are done in support for inter-African cooperation and mutual development," said Libya Africa Investment Portfolio chief Alhaj Bashir Saleh.
He confirmed that the hotel was bought for $45m.
The issue had split the fragile coalition government made up of Kibaki's Party of National Unity and Prime Minister Raila Odinga's Orange Democratic Movement (ODM) party.
ODM's Water Minister Charity Ngilu had openly called for the dissolution of the coalition if Kibaki failed to fire the minister.
Commentators had predicted that the scandal-tainted exit of a close Kibaki ally could shake up the fragile government coalition formed as a result of a February 28 power-sharing agreement.
After general elections in December, then opposition leader and pre-poll frontrunner Odinga had accused Kibaki of rigging his way to re-election.
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