East African Business Week (Kampala)
Cedric Lumiti
5 July 2008
Nairobi — The effectiveness of Kenya's coalition government came under its first major test last week as President Mwai Kibaki balanced almost non-exiting options to sack or not to sack his close ally, finance minster Mr. Amos Kimunya.
Following the Wednesday unanimous passing of a motion of no confidence by parliament on Kimunya over the controversial sale of a luxury hotel located in central Nairobi, Kibaki remained with no option but to sack the minister who had been until Wednesday under intense pressure to resign over the controversial sale of the Grand Regency Hotel.
Initial reports had indicated that the hotel had been bought by the Libyan Government, but the embassy in Nairobi has since distanced itself from the deal, saying that they had not been involved at any stage.
So, as Kibaki struggled with the tough option of bumping of a man who formed part of his frontline against ODM during the post election violence, Kimunya said he was still in office even as it became clearer that he corruptly sold off the lucrative Grand Regency Hotel to investors at a laughable amount.
MPs who have been calling forthe formation of an opposition led a protest march in Nairobi as another group of demonstrators marched through the streets of Mombasa to demand that the minister resigns or be sacked over his role in the sale of the Grand Regency hotel. In Kenya's Parliament, MPs started their boycott of all questions and motions related to the Ministry of Finance a day after passing a censure motion against Kimunya.
Mr. Gitobu Imanyara (Imenti Central, CCU) rose during question time to remind the Deputy Speaker that members would not entertain questions and/or motions related to the Treasury until the minister steps aside or is sacked.
Meanwhile, the team led by Attorney-General Mr. Amos Wako questioned the National Security Intelligence Service director-general, Maj. Gen.s Michael Gichangi, over claims that the agency pushed for the quick sale of the Grand Regency Hotel.
In another development, Kenya's Lands ministry placed a caveat on the hotel, blocking any further transfers of the land on which Grand Regency stands. The caveat also blocks the new owners of the hotel from securing bank loans using the property as a security.
The principal registrar of titles, Ms. Teresiah Mburu said: "This caveat forbids the registration of any dealing with the land absolutely."
On Thursday, Government spokesman Mr. Alfred Mutua issued a statement saying the move was taken to protect the property.
Dr. Mutua said the caveat was called for by "the enormity of the matter concerning the Grand Regency Hotel" and was meant to protect the property until issues related to the sale are concluded.
The lawmakers accused the finance minister of colluding with unnamed people of defrauding Kenyans and investors during the recently concluded sale of Kenya's largest mobile service provider, Safaricom Initial Public Offering.
"Kimunya has been involved in so many shady deals at the Treasury. These included in the sale of Safaricom IPO, in the money printing form De La Rue and the latest sale of the Grand Regency Hotel. I demand that he resigns to protect his integrity," said Mr. Charles Kilonzo, another lawmaker.
The previous week, lands minister James Orengo blew the lid off the brewing financial scandal when he announced that the hotel had been sold to unknown investors. This followed spirited denials by Kimunya that the hotel had been sold.
After Orengo's revelations, Kimunya convened a press conference in which he admitted having sold the hotel for Ksh2.9 billion. This was however refuted by Orengo who displayed transfer documents to the media which indicated that the hotel had been actually soled at Ksh1.8 billion over one billion less than what Kimunya told the public. Orengo further proved that the hotel was never sold to Libyan investors but to a Kenyan registered company whose owners had their names missing in the transfer documents.
Since the revelations, Kimunya has been sidelined with even most of his colleagues in the cabinet amid claims that the deal had served to benefit a few elements in Kibaki's government and was a serious blow to the war against corruption.
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