By JACKSON MWALULU (email the author)
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Posted Monday, August 4 2008 at 17:02

ACCUSATIONS AND COUNTER-accusations have been flying over the Grand Regency Hotel saga. Indeed, about a month ago, former Finance minister Amos Kimunya was forced to step aside to facilitate investigations into allegations of corruption in the disposal of the five-star hotel.
Since then, the matter has generated more heat than light. One side of the divide has maintained that there was ‘‘grand corruption’’ in the disposal of what is considered a public asset.
On the other hand, there are those who hold that the former minister is a victim of political shenanigans within the Grand Coalition Government.
While the main plank in the perspective of the former is that the Grand Regency is in the first place, not a public asset, the latter insist that the hotel is owned by the public through the Central Bank of Kenya.

TO SAY THE LEAST, THE GRAND REgency matter is complex. The average Kenyan is confused by the rigmarole in the whole affair. It has not helped that the matter hacks back to the early 1990s and sucks in the so-called chief architect of Goldenberg, Mr Kamlesh Pattni.
When the matter exploded in Parliament over a month ago, the chief sponsors of the motion were MPs perceived to belong to the “Grand Opposition”.
At the heart of the sale of the hotel is the Central Bank of Kenya as well as the Kenya Anti-Corruption Commission. And to cap the complexity of the issue, the ‘‘new’’ owner of the hotel is Muammar Gaddafi’s Libya. In the midst of such a great number of players in the saga, it is understandable that emotion take precedence over sober separation of fact from fiction. It is against this backdrop that the Parliamentary Committee for Finance delved into the matter. The Chris Okemo-led committee is said to be drawing its final report for presentation to Parliament later this week.
Given the intricate nature of the Grand Regency sale, every right-thinking Kenyan expects that the Okemo team will emerge with an objective report that will once and for all set the record straight.
If, for instance, the report is seen as slanted against Mr Kimunya and a section of Government, it will only fuel suspicions within the Grand Coalition.
Indeed, when the Speaker, Mr Kenneth Marende, gave the order that the Finance Committee concludes the matter, it was in appreciation of the fact that it would have been difficult for the matter to be concluded on the floor of the House.
After hearing submissions from principal witnesses, the committee should now make head or tail of the affair. This will call for a need to avoid emotion – as would be expected on the floor of the House – and focus on the irreducible legal and business facts that informed the controversial sale.
Woe unto the committee should it fall for sectarian interests that inform power politics in the Grand Coalition. The committee would have sacrificed integrity at the altar of cheap and tenuous political scores. The result would be incessant wars within the Grand Coalition which do not augur well for national stability.
This far, the perception in the public domain has been that the core mandate of the committee is to find fault with Mr Kimunya and others adversely mentioned in the saga.

THE FEELING IS THAT THE COMMITtee will try to sustain charges levelled against those accused of misconduct in the sale. But it should provide equal opportunity to both the accused and the accuser. If one side is seen to have got the better of the other, the committee would have failed the credibility test.
Concerns about impartiality by the Okemo committee are not wholly unfounded. In the past, some reports by departmental committees of Parliament have fallen prey to political expediency, leading to their rejection. The country is in an expectant mood on this particular finding and a sloppy verdict will only erode trust in Parliament and cost this important institution its credibility.
Coincidentally, the findings of the Okemo Committee will be released as the Majid Cockar Commission commences hearings on the same matter. It will be interesting to compare the conclusions of the two entities given that their terms of reference are almost similar.

Thank you for the articles (posted on Nation and EA Standard).

Word of caution: This is an opinion by former MP Jacskon Mwalulu. Some of us know him from his student days. An opinion expressed cannot be said to be the whole truth. We now have the Parliamentary Committee (bigger than Mwalulu) and the Cockar Commission (bigger than Mwalulu) which will give us their reports. DETAILED REPORTS. We also will see the witnesses who will go to the committees. So my friend, hold your horses. In time we shall see if our dear MP for Kipipiri is innocent or guilty. As for now he is innocent until proven guilty. BUT he had to step down to allow impartial and independent investigations.

In the meantime, enjoy this recent GEM from Hon. Kimunya.

http://www.youtube.com/watch?v=-Ucu-iBHJ4Y


MM

A HOTEL WORTH BILLIONS ID VALUED WITHIN 3-HOURS USING EXCEL SOFTWARE AND ESTIMATED FINANCIAL DATA.

http://kbc.co.ke/story.asp?ID=51751

Grand Regency Valuation took only three hours, commission told

Written By:Judy Maina , Posted: Fri, Aug 08, 2008

The chief government valuer in the ministry of lands Antony Itui was on
Friday put to task to explain how he arrived at the 2-billion shillings
figure as the going price for the Grand Regency hotel.
Itui told the Justice Majid Cockar Commission into the saga that being under
pressure from the commissioner of lands, he opted for the contractors method
which involved inspecting the cost of the building and its surroundings, a
process that took only three hours.
He said the inspection took place on the June 23 2008.
He said the following day the compiled report inclusive of the value of the
stamp duty for the hotel was issued.
Itui said they also assessed the value of other plots within town for
comparison.
Meanwhile Senior Land Registrar Zipporah Mule said the wrong entry in the
land transfer document was realized after a media outcry.
She however said a correction done later was within the Land's Act.
Yesterday the commission was told that there was a mistake in the entry of
the hotel transfer fee where 2.5 billion shillings was quoted instead of
1.85 billion shillings, being the said actual value of the hotel.
The commission was however told that at no time was the then Finance
Minister under investigation Amos Kimunya in contact with the lands
ministry.

http://www.bdafrica.com/index.php?option=com_content&ta...&id=9329&Itemid=5822

CBK didn’t disclose hotel was being sold, valuer tells Cockar
Written by Mwaura Kimani

Mr Masika testifies at the Inquiry yesterday. He said CBK reversed an earlier instruction of valuing the property for accounting purposes.

The Grand Regency HotelAugust 13, 2008: Central Bank of Kenya reversed its earlier instructions to a company it had hired to value the Grand Regency Hotel in January, the Commission of Inquiry investigating the sale of the property heard yesterday.

Mr David Masika, the chairman of Lloyd Masika Limited, one of the three companies that the CBK contracted to value the hotel, told the commission that instructions issued on January 21, 2008 were that the valuation was being done for accounting purposes.

“CBK instructed us to urgently and confidentially inspect and value the property for book-keeping and accounting purposes,” Mr Masika told retired chief Justice Majid Cockar, who chairs the commission.

A week later, he said, the CBK wrote to Lloyd Masika instructing it to value the hotel as a going concern.

Mr Masika, said his company declined to comply with the new orders because of the difficulties involved in such a task for a hotel that had been making losses over the years with an occupancy rate of 20 per cent.

“CBK did not disclose to us that it was selling the hotel and we deemed it fit to continue with the earlier instruction as opposed to the going concern idea since the hotel was in poor condition and was making losses,” said Mr Masika.

Lloyd Masika gave its report to CBK on February 25, 2008, pricing the hotel at Sh1.754 billion, mortgage value at Sh1.27 billion and forced value at Sh1.06 billion. The company valued the land on which the hotel stands at Sh500 million.

Valuation prices returned by various valuers for the hotel, which has since been taken over by the Libyan Arab African Investment Company Kenya Limited, were all below the sale price of Sh2.9 billion.


Goodwill factor
Mr Masika said had the property been valued as a going concern, the figure would have been higher as goodwill would have been factored in.

Lawyers representing different parties at the commission took Mr Masika to task to explain how his firm’s valuation which was below the sale price was conducted.

The valuer said the firm also compared its figures of the 227 rooms Grand Regency Hotel with other hotels that had been sold in the last two years. He said Mombasa InterContinental Hotel with 176 rooms had been sold for Sh460 million in March 2006 although it had been run down by the time of valuation.

Also considered for comparison was Nyali Beach Hotel with a capacity of 212 rooms which was sold in the same year at a cost of Sh650 million.

Last week, Anthony Itui, the chief government valuer said a valuation done for purposes of stamp duty arrived at a figure of Sh2 billion, pricing the hotel land at Sh700 million

Another valuation by the Value Zone commissioned by CBK, put the open market value at Sh1.6 billion, mortgage value at Sh1.2 billion, forced value at Sh1.1 billion.

But Ark Consultants, also contracted by CBK put the open market value at Sh2.17 billion with Sh600 million taking care of the land, building and site works at Sh1.1 billion, plant and machinery Sh350 million, furniture and fittings Sh75 million.

Ark Consultants had written to CBK in March saying Lloyd Masika Limited undervalued the hotel citing what it termed as big discrepancy in the values of the plant and hotel machinery items.

The open market value of the Value Zone Limited did not include the motor vehicles in their report while the plant and machinery items are still operational.

Last week, Westmont Holdings, a Malaysian firm claiming to have approached CBK to buy the hotel ten years ago, told the Commission that it had valued the hotel at Sh4.5 billion then.

Cabinet minister Mutula Kilonzo, the lawyer who said he presided over the purchase of the hotel by Pattni in 1994, indicated in June the price of the hotel then was Sh4 billion.

Kimunya was right, says Orengo
The facts are getting on board!
Former Finance minister Amos Kimunya was legally correct when he said in Parliament in April that the Grand Regency Hotel had not been sold, Lands minister James Orengo admitted on Friday.
Mr Kimunya made his statement in Parliament on April 29 and the agreement to sell the hotel to the Libyans, the commission heard, was concluded on May 5.

Justice Cockar commission will shame the liars, unfortunately they do not have guts to stand up and apologise far much less step down.
facts not populist fiction and mud slinging should be used to judge Kimunya

Yes, Thankfully Justice Cockar has been fair handed and so far the verdict is progressing still in sight of CBK and Finance Ministry.

a) More confusion over selling price and rate - http://www.nation.co.ke/News/-/1056/472098/-/tktpat/-/index.html


b) CBK and Treasury used colluded to get tranfers without Lands Minister knowing - http://www.nation.co.ke/News/-/1056/471668/-/tkt5lq/-/index.html


c) Hotel sold quickly secretely so that others dont know - http://www.nation.co.ke/News/-/1056/471248/-/tkt2f5/-/index.html


d) Hotel sold in secret- http://www.nation.co.ke/News/-/1056/471120/-/tkt1ko/-/index.html

Lawyer Harrison Kinyanjui referred Abuga to a statement by CBK Governor Njuguna Ndung’u stating the hotel was sold at $45 million that translated into Sh2.95 billion against the exchange rate of Sh65.

He pointed out the mathematics did not add up since the calculation yielded a much lower figure of Sh2.925 billion instead of the stated sale price of Sh2.95 billion.

"Do you notice Sh25 million is unaccounted for," Kinyanjui, who represents Westmont Holdings, a Malaysian firm that was involved in a botched purchase of the hotel a decade ago, told the witness.

Kinyanjui then directed Mr Abuga to another document in which Ndung’u said the bank had pushed for the sale of the hotel to the Libyan firm at a net price of $45 million negotiated at an exchange rate of Sh70 to the dollar.

Kinyanjui told the commission chaired by retired Justice Majid Cockar that if the Sh70 exchange rate were to be used the figure would translate into Sh3.15 billion, Sh200 million more than the actual price.

He told the witness during cross-examination the official exchange rate on May 6, a day after the sale agreement between CBK and Libyan African Investment Company (Laico), was Sh61.83.

The lawyer asked Abuga: "Are you aware of these discrepancies that crop up in the sale of the hotel? Were you aware that the exchange rate of Sh70 was applicable in the transaction?"

quote:

According to Prof Njuguna, The GR Hotel sold at $45 milion and he converted at 65 shillings = 2.95 billion shillings. However Njuguna's fuzzy math converted it to 2.925 billion shillings thus pocketing 225 million for self and his boys.

That was not the only fuzzy math. Apparently in real, the prevailing rate at sale was shilling 70 to the dollar. This means the monies would have amounted to 70 shillings X $45 million dollars = 3.15 million. This means a difference of 200 million pocketed by kimunya and his boys.

Total 225 million shillings. And this is just what is Obvious.

How about the difference between the real value and that $45 million dollars?

CBK received payment for GRH in USD so anybody with half a brain knows the issue of exchange rates does no arise!

QUOTE]

This message has been edited. Last edited by: Moderator1,

S

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Raila briefed on hotel sale
“It was on April 23 when I briefed the Prime Minister. I briefed him in my own write-up explaining the history of the hotel and how we have managed to reach where we were,” CBK governor Njuguna Ndung’u told the inquiry.
Meanwhile, former Finance minister Amos Kimunya made his statement in Parliament that Grand Regency Hotel had not been sold on April 29.
By then negotiations on the hotel sale had been going on, but the actual agreement to sell it was concluded in May and not on March 8 as we reported oon Tuesday. We apologise for the error.FACTS FACTS FACTS!!
Disciples of lies and evil propaganda where art thou? I keep reading some comments made here sometimes back by people of irrefutable fame and I can't help but feel sad for Kenya.

This message has been edited. Last edited by: Ngii Ndune!!,

hmmm

was this the "unsigned" and "undated" write-up that Njuguna shared with Ringera and Raira?

http://multimedia.marsgroupkenya.org/?StoryID=224959&p=State+House&page=3

until I see a signed and dated doc with the seal of CBK, even me I cant just believe what you drop on my desk.

sorry, a CBK gov should not be dealing with unsigned and undated docs and thinking that is enough briefing.

Example- would PM Brown take an un-signed and un-dated govt proposal to Queen Elizabeth? Would Secretary Rice take an unsigned and undated govt proposal to Pres. Bush? Would a Finance Director take an unsigned and undated corporate document to his Managing Director?

HELL NO!!!!!!!!!!!!!

You can brief me orally, you can have your aide brief me orally, you can brief me with unsigned and undated docs.

But i aint a fool to trust nothing that is not-legal-binding. Until i see an official legal document, hiyo yote ni porojo.

Just dont ask me to go to court and defend your "briefing" WHICH HAS NO LEGAL LOCUS STANDI. sorry.

EVER HEARD OF THE TERMS: the devil is in the details and just sign the dotted line and date it to make this document legit!!!!

Q: if a document is undated and unsigned, whom should I make my response to and with reference to which document (dated when?). hehehehehehe

i actually like the fact that Justice Cockar has demanded all docs (unsigned and undated ones included).

thsi will be pretty interesting!!!! hehehe