Kenya’s finance minister was battling for his political life on Thursday after a government report into the secretive sale of a luxury Nairobi hotel recommended he step down to allow a full investigation into the ”fraudulent” transaction.
By Barney Jopson in Nairobi
The report, from a five-member team led by Attorney General Amos Wako, followed a no-confidence vote against the minister by Kenya’s parliament on Wednesday.
The sale of the Grand Regency to a Libyan investment group has triggered unsubstantiated allegations of corruption and sparked a political storm after it emerged the deal was struck behind closed doors and at a price that experts say undervalued the business significantly.
Amos Kimunya, finance minister since 2006, has faced a chorus of calls for his resignation from lawmakers and civil society groups. He rejected allegations of wrongdoing ahead of the vote in parliament and his fate lies ultimately in the hands of president Mwai Kibaki, who is considered a close ally.
In the 1990s the Grand Regency became associated with the biggest corruption scandal of Daniel arap Moi’s presidency and its emergence at the heart of a new controversy is a reminder of Mr Kibaki’s failure to stamp out corruption as he promised when first elected in 2002.
The controversy has also exposed the fault lines within Kenya’s fragile coalition government, which was created four months ago to end the violence triggered by Mr Kibaki’s election to a second term in December’s disputed presidential poll.
Mr Kimunya had previously denied rumours of the hotel’s sale, but details were made public last week by the lands minister, a member of the opposition party that challenged the president in December. The minister has said he is considering revoking the deal.
Raila Odinga, prime minister and former opposition leader, has seized the opportunity to boost his status as the government’s chief enforcer and this week appointed a five-person committee to investigate the sale. “Nobody is indispensable on matters of corruption. Not even president Kibaki or myself,” he said.
Some of Mr Kimunya’s former allies have also rounded on him, including Martha Karua, the powerful justice minister, who has called for “full disclosure” on the deal. Other members of parliament say the sale flouted Kenya’s laws on the procurement and disposal of public assets. President Kibaki has so far remained silent on the matter.
The Grand Regency was on the books of the Central Bank of Kenya having been recovered earlier this year from Kamlesh Pattni, a Kenyan businessman accused of being the architect of the Goldenberg scam, a bogus gold export scheme from the Moi-era. Mr Pattni has been tried but never convicted following several investigations.
The new owner of the five-star hotel has been named as the Libyan Arab African Investment Company. It acquired the property for a reported KSh2.9bn less than Mr Pattni paid for it in 1994.
Bonny Khalwale, a member of parliament who moved the motion to censure the finance minister, said: “[Mr Kimunya] is today the prince of impunity . . . The minister has his 10 fingerprints on corruption in this country.” Before the vote Mr Kimunya told parliament: “My hands are totally clean on this transaction.”
The Financial Times
