efforts to divest of shareholdings in doubt
Confusion reigns over asset directive by the Transition Authority
(eTN) - A directive issued earlier this week by Kenya’s “Transition Authority” (TA), which is charged with an orderly transfer of assets to a number of new administrative entities created under the new constitution, has thrown in doubt efforts to divest of shareholdings by the Kenya Tourist Development Corporation (KTDC), which was aimed to generate funds as well as streamline their portfolio.
The Kenya government, through KTDC, holds greater or lesser percentages in the shares of such companies like the InterContinental Hotel, the Hilton Hotel, Mountain Lodge, Kenya Safari Lodges comprising Voi and Ngulia safari lodges and the Mombasa Beach Hotel, and a range of others, which were due to go on sale already last year.
In a number of cases, the other shareholders in the companies will have a first right of refusal, i.e., must be offered the shares first before the general public would have a chance to buy into those companies, and in some cases a clear interest to do so was already expressed publicly.
However, the directive by the TA this week has now created a legal grey area as it is presently unclear if the directive also applies to KTDC holdings, as after all a number of new parastatal bodies were created under the recently-gazetted Tourism Act, some of which may require asset transfers from the previous corporate bodies.
The directive is presently in place backdated to March this year until March 2016, and though clarification is being sought, this may delay matters once again.
The general public has, in the past, denounced the undervalued sale of public property and assets to politically well-connected individuals and demanded that past deals be investigated and where possible reversed to stem corruption, and in the case of tourism, the most glaring of such transfers was the sale of the Grand Regency Hotel some years ago to Gadaffi’s LAICO Hotels, which raised a massive storm of public outrage and complaints but was let go anyway, carried out by none other than controversial Amos Kimunya, now again under the spotlight of a parliamentary committee for his alleged misdeeds as transport minister.