allAfrica.com: Kenya: Why Kimunya Quit (Page 1 of 2)

Barely 44 hours after vowing he would rather die than resign, Finance minister Amos Kimunya finally bowed to pressure and stepped aside Tuesday to allow for investigations into the controversial sale of the Grand Regency Hotel.

Mr Kimunya said he made the decision after consulting President Kibaki, his own family and colleagues.

Sources said that during one of the meetings, President Kibaki made it clear to Mr Kimunya that he should respect the vote of no-confidence passed by MPs last week and pave the way for investigations into the Grand Regency saga.

President Kibaki was at his Harambee House office Tuesday morning and sources said he held another meeting with Mr Kimunya.

After the talks, the minister called a press conference to announce that he was "stepping aside".

He said: "I have requested his Excellency the President to be allowed to step aside to facilitate the inquiry".

MPs who had threatened to frustrate debate on the Budget if Mr Kimunya did not resign, changed their mind after the announcement.

Mr Kimunya's words were similar to those uttered by his predecessor at the Treasury, Mr David Mwiraria, when he too stepped aside to pave the way for investigations into his alleged involvement in the Anglo Leasing scandal.

At the time, Mr Mwiraria along with his Cabinet colleague, Mr Kiraitu Murungi, resigned from the Cabinet after being mentioned adversely in connection with the Anglo Leasing scandal. The two bowed to pressure after revelations by the then Governance and Ethics permanent secretary John Githongo who later went into self-exile in Britain.

At the time, Mr Kimunya was transferred from the Lands Ministry to Finance after Mr Mwiraria quit. The then Environment minister Kivutha Kibwana was named to act as Lands minister.

Now that Mr Kimunya has stepped aside, President Kibaki can either name a substantive replacement or appoint an acting minister from serving Cabinet ministers to fill in at Finance.

Early indications from sources familiar with events leading to the announcement Tuesday were that the President was likely to name an acting minister until the investigations are completed.

In the event that the President names an acting minister, there will be limits to what the new office holder can do.

An acting Finance minister cannot sign agreements committing the Government to loans either locally or abroad. He or she cannot also sign on repayments to such international lenders as the World Bank, IMF, International Finance Corporation, or bilateral lenders.

The minister would be confined to signing routine appointments such as those of chairmen and boards of directors for parastatals, moving motions or Bills in Parliament, answering questions by MPs and answering on behalf of the Treasury during Cabinet meetings.

Mr Kimunya is the first minister in the grand coalition to step aside to pave the way for investigations.

In Parliament, Prime Minister Raila Odinga accepted that he did receive a briefing about the controversial sale of the Grand Regency Hotel from Central Bank Governor Njuguna Ndung'u.

However, he said the briefing only came after stories about the sale of the five star hotel appeared in the press.

"On April 23 this year, I received a telephone call from the Governor of the Central Bank who told me that there was something he wished to share with me as Prime Minister, concerning adverse stories appearing in the media. I met him in my office the same evening," the PM said.

Unsigned document

He told the MPs that Prof Ndung'u presented him with an eight-page, undated, unsigned, typed document "which purported to give a background to the Central Bank's involvement with Kamlesh Pattni and the case of the Grand Regency".

Mr Odinga also said that 90 per cent of the payments for the hotel was still being retained in a lawyer's bank account. The hotel was sold for $45 million or about Sh2.9 billion.

This would mean that the Government is yet to receive Sh2.6 billion. Land transactions processed by lawyers require that money paid by the buyer remains with the lawyers until the transaction is completed. However, there is a limit of how long a lawyer can keep the money.

While passing the vote of no-confidence against Mr Kimunya last Wednesday, MPs accused him and several other public officials of failing to follow the laid down rules and regulations on the sale of public assets during the sale of the hotel in Nairobi, the Safaricom Initial Public Offering and other transactions involving parastatals.

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