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Kenya, Libya

Kenya’s Grand Regency to be valued again

Wolfgang H. Thome, eTN Africa  Sep 16, 2008

Kenya's Commission of Inquiry, chaired by retired Chief Justice Majid Cockar, has ruled that in the face of emerging evidence, the Grand Regency Hotel, sold some weeks ago under clouded circumstances, must be valued afresh at the expense of the Kenyan government and paid by the Central Bank of Kenya.

The sales price immediately raised the emotions across Kenyan society and politics, as it was described as a “throw away” and even a “gift” to the Libyan purchasers, Libyan African Investment Company (Laico).

Allegations of backroom deals and corrupt practices went hand in hand with the public outrage. Parliament then constituted their own committee to investigate claims made in connection with the sale and government, under pressure from parliament and the public, launched a judicial commission of inquiry chaired by Justice Cockar.

The new ‘owners’ were reportedly reluctant but eventually agreed to give access to the appraisers just as soon as a team has been put into place. The hotel was sold at 2.9 billion Kenya shillings (approximately US$40 million) but some opinions given in private and public put the value as much a four times higher.

Laico last week also changed the name of the hotel to Laico Regency Hotel which was described by many as a vain attempt to set themselves apart from and put some distance between them and the raging scandal. The name change, however, only seems to have inflamed the situation some more and the Kenyan public is eagerly awaiting the outcome and final verdict of the two enquiries.

The judicial commission of inquiry has also asked for a second extension of their term to interview yet more witnesses and unravel this complex net of allegations made over the “sale.” Among the witnesses who only recently testified after finally receiving their subpoenas was reportedly also Lands Minister James Orengo, whose testimony was considered crucially important for the outcome of the case, when he denied the sale was between government and government in the absence of cabinet resolutions, casting yet more doubts on the whole affair. If accepted by the Commission of Inquiry, the testimony would lend credence to claims that the sale was done secretly and without following proper procedure. The minister further went on record to have instructed the lands registry not to transact any business in connection with the hotel sale while he was away at the time from Nairobi but found his order ignored when he returned to the city.

A new valuation is expected to be presented to the Commission of Inquiry any time from now.

Kenya’s Grand Regency to be valued again

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