Fresh details which emerged today regarding the secret and hurried plans by President Kibaki to sell off the landmark Grand Regency Hotel to a Libyan company revealed the grand corruption that riddled PNU campaigns in the December 27 General Election.
It emerged that the sale revolves around a secret Memorandum of Understanding (MoU) President Kibaki signed with Libya’s President Muammar Gaddafi during a three-day visit to Libya last June as part of his global plans the raise funds to run his re-election.
Libyan Leader Muammar Qaddafi with President Mwai Kibaki when he bade him farewell after his three day visit in Sirte, Libya.
President Kibaki had lost favour in the traditional Western friends of Kenya and his following at home had taken a nose-dive due to his poor leadership and his involvement in the Anglo Leasing Scandal and he was desperately looking for alternative sources of raising campaign funds.
Libya came in handy – but with a heavy price. President Gaddafi required a substantial control of Kenya’s wealth in order to bail out President Kibaki who was facing the biggest test of his political career in the December 27 polls.
During the begging mission, the two presidents “negotiated” and agreed on an MoU that has a direct bearing in the sorry state of affairs regarding the Grand Regency Hotel. Titled "Agreement on Promotion Guarantee and Protection On Investment," the MoU was signed by Kenya's then Minister for Trade, Dr Mukhisa Kituyi, and Dr Ali Elisaue, Secretary General of Libya's General People's Committee for the Economy and Investment.
According to Kibaki’s close aides privy to the MoU deal and the subsequent take over of the hotel by the Government, the purchase of the hotel – a symbol of greed, theft and grand corruption which was the hallmark of President Moi regime - was among six projects that the Libyans had expressed interest in when the President visited the oil-rich North African country between June 4 and 6 2007.
In exchange of signing the lucrative MoU with Libyans, President Kibaki received an unspecified amount of money to fund his presidential re-election campaigns.
Interestingly, Kibaki was committing himself to sell the hotel to a group comprising Libyan investors trading as Libyan Arab African Investment Company even before the Government wrestled the ownership of the prestigious Nairobi landmark from the architect of the infamous Goldenberg scandal, Mr Kamlesh Pattni.
The MoU was part of President Kibaki’s strategy to raise funds for his re-election campaign. Other major presidential candidates Mr Raila Odinga and Mr Kalonzo Musyoka did similar missions abroad to raise funds for their campaigns. It’s not known how much funds each of the three candidates raised.
Reports indicate Mr Odinga also signed secret MoUs with foreign firms and individuals which he promised to honour if he trounced President Kibaki and formed the Government. Locally, Mr Odinga signed other controversial MoUs like the one he did with a section of Muslims. But the most shocking MoU relate to the unfolding saga of how President Kibaki shamelessly traded with public resources to win funds to run his PNU campaigns.
According to Kibaki’s aides, President Kibaki and his delegation promised to sell the hotel to the Libyan investors at Sh2.5 billion, yet this was the price set by the Central Bank Kenya 15 years ago. Financial market analysts say the hotel is today valued at Sh7 billion.
Last month’s stage-managed handover of the hotel to the Government by Mr Pattni left many questions unanswered.
Receiving the hotel on behalf of the Government was Mr Justice Aaron Ringera, the head of the Kenya Anti-Corruption Commission, and Governor of the Central Bank of Kenya, Prof Njuguna Ndung’u, showered Mr Pattni with platitudes “for his selfless gesture”. A beaming Mr Ringera described it a first in the war of asset recovery.
On his part, Mr Pattni talked of surrendering the hotel in exchange of amnesty from further prosecution regarding the plunder of CBK’s coffers under the close watch of retired President Moi. The plunder of CBK and other state coffers under the watchful eye of Mr Moi almost drove Kenya into the knees and rendered more Kenyans poorer.
In a strange twist of events, Attorney-general Amos Wako said he was not consulted in the surrender deal raising questions on why the chief legal adviser to the Government was kept in the dark.
When reports emerged that the five-star, which has been at the centre of furious legal battles between CBK and Mr Pattni for 15 years, had secretly been sold to Libyan investors, Prof Ndung’u, Mr Ringera and Finance minister Amos Kimunya swiftly issued denials. Mr Kimunya claimed the hotel will be sold within a month through auction.
Mr Kimunya has perfected the art of making cheap lies on camera ever since he became President Kibaki’s top confidant. He kept on giving disjointed and incoherent answers when journalists cornered him in regard to the secret Grand Regency deal.
The question that has bogged the minds of many Kenyans in the last one month is: Why was are the content of the deal entered between Mr Pattni and the Government being kept a secret and why was the Government in such a hurry to sell the hotel before advertising it in public?
It emerged today that the secret negotiations with Mr Pattni and the subsequent hurried plans by President Kibaki’s cronies to dispose off the hotel emanated from the intense pressure President Kibaki has been getting from his Libyan counterpart to honour the June MoU (Kibaki has a bad reputation of honouring MoUs bearing in mind he shamelessly trashed a power-sharing MoU he signed with Mr Raila Odinga before he propelled him to State House in 2002 General Election).
The only fruits the Libyans have reaped from the MoU deal is the acquisition of all Mobil petrol stations in Kenya by Oilibya. President Kibaki is yet to honour the other lucrative part of the deal which earned him handsome funds for his PNU campaigns.
According to reliable information from Kibaki’s aides, President Gaddafi started becoming uneasy with the slow pace his Kenyan counterpart was moving at in implementing the deal in February and that’s why he dispatched a top Libyan Government official to Kenya purportedly to “talk” to President Kibaki and Mr Odinga to strike a political deal to end the political and security crisis that was sparked off by President Kibaki’s stealing of an election victory from Mr Odinga.
It was during the meeting with the Libyan official at State House Nairobi that President Kibaki agreed to meet President Gaddafi when he visited Kampala in March.
The meeting between President Mwai Kibaki and the Libyan Leader Muammar Gaddafi took place on the evening of May 19. According to a PPS dispatch to newsrooms, the two leaders held bilateral consultation “to review the status and progress of the implementation of the agreed framework of co-operation between the two countries which was signed in Sirte during President Kibaki's visit to Libya mid last year.”
It did not occur to Kenyans at the time what the diplomatic PPS dispatch meant. Kumekucha can today authoritatively reveal that President Kibaki travelled to Kampala because the Libyan president was exerting pressure on him to honour the MoU which they signed in exchange for funds for his PNU campaigns.
It is worthy noting that President Kibaki flew to Kampala in the thick of a political stalemate back at home to meet President Gaddafi who was in Kampala to commission a new mosque. President Gaddafi was on official visit to Kampala on the invitation of President Museveni. Who had invited Kibaki and what was his mission in Kampala?
It has emerged that President Kibaki promised President Gaddafi he would do his best to honour the pact and this is what has triggered a furry of high-profile activities regarding the Grand Regency.
It has emerged that the CBK chief and his KACC counterpart had to literally beg Mr Pattni to agree to surrender his hotel to the state and hence the praises the two showed on a man the Bosire Commission of Inquiry into the Goldenberg Scandal described as Kenya’s Number One Conman.
Our sources disclosed that President Kibaki’s joy of making Mr Pattni surrender the hotel were cut short when an Indian company fronted by internationally-renowned wealthy tycoons, which had already moved into Kenya and placing itself in a strategic position to buy the hotel when it was put to the hammer, sent an unsolicited bid to Mr Kimunya with an offer exceeding Sh2.5billion by far.
The Indian company, through Conman Pattni, had been following the secret negotiations and they swung the unsolicited bid when Mr Pattni sealed the deal with Mr Ringera and Prof Njuguna. According to plan, the secret deal between President Kibaki and President Gaddafi regarding the Grand Regency would have been sealed as soon as Mr Pattni gave in and handed over the hotel.
But the unsolicited entry into the Grand Regency buying bid by the India firm and the sudden attention Kenyan media had shown on the Libyan sole bid, jolted Mr Kimunya and President Kibaki since they feared the exposure of the scandal of how they secretly sold off the hotel without any public bid while there was another bidder offering a higher amount.
Matters were worsened when some Treasury officials, serving the interests of the Indian firm, leaked to the Kenyan media the secret plans to sell off Grand Regency to the Libyan firm without any public bid. The Press went to town with the story.
This forced President Kibaki to order Mr Kimunya to urgently contact Dr Elisaue and Libyan Arab African Investment Company to explain to them the new developments and ask them to raise their bid slightly higher than the amount being offered by the Indian firm.
We established that the Libyan firm had grudgingly accepted to raise their bid but the Indian firm, which boasts of the fifth richest man in the world, Mr Mukesh Ambani, who early last month partnered with an Arabian real estate firm, Arrow Webtex, to form Delta Resources Limited, is not willing to give up the hotel and has promised to fight on.
As Kibaki was promising to sell off the Grand Regency to the Libyian firm, little did he know that the Indian firm had arrived in Nairobi and it had placed itself in a strategic position to bid for the hotel when it is put to hammer.
The Indian firm had already bought a huge parking lot next to Grand Regency at a cost of Sh1.4 billion from the National Social Security Fund in anticipation for the expansion of the hotel if it managed to seize its ownership.
The company has also reportedly bought another parking lot between Barclays Plaza and Nyati House, where it plans to build a number of top-end hotel and shopping malls, creating a “city within a city” around the hotel complete with modern shopping centres, casinos and other entertainment services.
That’s how the stakes are so high for the Indian firm and it’s unlikely they will let go their quest to own the hotel, which was built by Mr Pattni using CBK loot, in order to please President Kibaki and his preferred Libyan firm.
Interestingly, the Kibaki Tena website, a State House-backed lobby group spearheading President Kibaki’s re-election drive, mentions about the visit President Kibaki did to Libya last June. However, the story posted on the website only dwells on the trade packs President Kibaki and the Libyan leader signed but doesn’t mention the funds he received for his PNU campaigns.
The Indian firm’s shocking entry into the Grand Regency purchase bid has given President Kibaki and his lieutenants sleepless nights and it remains to be seen how they will overcome the issue of the campaign funds justify they received from Libya if the hotel goes to other buyers.
Dr Kituyi who signed the MoU on behalf of President Kibaki was a trusted lieutenant of the president but he was sent packing from Parliament by his Kimilili constituents and he is rotting in the political cold. His docket was taken by Mr Uhuru Kenyatta, a foe-turned loyalist of Kibaki. But the question is: Why has Uhuru vanished from the public limelight since the Grand Regency scandal started unfolding and the trade pact that promised to sell off the hotel to Libya lies squarely in his docket? Is he in Libya or India trying doing Kibaki’s errands to contain the Grand Regency scandal?
Surprisingly, all the key figures handling the Grand Regency saga (President Kibaki, Uhuru, Kimunya, Prof Njuguna and Mr Ringera) have one thing in common: the Mt Kenya link. Libyans have firmly set their eyes on the oil and petroleum industry in Kenya and it’s no surprise that another Mt Kenya figure and key ally of President Kibaki, Energy Minister Kiraitu Murungi, was present in Libya during the MoU signing.
Under the MoU, President Kibaki committed Kenya into granting an exclusive trade pact to Libya, making Tripoli "most favoured nation" status - making it possible for Libyan companies to start at an advantage over investors when competing for lucrative contracts.
The irony is that Mr Ringera, who earns a whopping Sh2.5million from tax payers plus other lucrative perks to fight high-level graft, is the man at the centre of legalising the Kibaki-sponsored Grand Regency scandal. Instead of doing his job and catching all the thieves in the Grand Coalition Government (there are a good number corrupt political heavyweights in PNU, ODM, ODM-K, KANU and in other parties) and in the civil service, Mr Ringera has chosen to go after the small fish like traffic policemen and junior civil servants who take small bribes from Kenyans who are struggling to rise from the yokes of poverty.
Why should Kenyan’s continue paying huge salaries to Mr Ringera and his staff and pumping billions into the KACC drain every year for no work done and to commit serious acts of legitimising Kibaki-made scandals like the Anglo Leasing and the Grand Regency Scandal?
KACC under Mr Ringera has taken civil servants to court for single sourcing or awarding contracts to companies without offering public bids. Why is the Libyan deal an exception?
We now know why Kibaki stole the election to remain in power for another five years.
Other stories published in Kumekucha today;
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