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"id": 190436,
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"speaker_name": "Mr. Raila",
"speaker_title": "The Prime Minister",
"speaker": {
"id": 195,
"legal_name": "Raila Amolo Odinga",
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"content": " Thank you, Mr. Speaker, Sir, for giving me an opportunity to make a Statement to the House. With your permission, Mr. Speaker, Sir, I wish to make a Statement about the controversy surrounding the sale of the Grand Regency Hotel. I have decided to make my first Prime Ministerial Statement on this subject in this House, as I am a fervent advocate and an admirer of parliamentary democracy. The media has a vital role to play, but there are some subjects for which I do not wish to inform the people of Kenya what I knew, when I knew and what I did through paid Press conferences or paid advertisements. July 8, 2008 PARLIAMENTARY DEBATES 1675 This House occupies a central role in the Kenyan politics and society in general. My loyalty is the supremacy of this Parliament other than any individual. This House has the power and responsibility to question how and when Government decisions are made, to ensure greater transparency and maintain high standards of financial probity. I value that very immensely. With those few opening remarks, I wish to share the following sequence of events that will inform hon. Members of my role as the Prime Minister. Mr. Speaker, Sir, On 23rd April, 2008, I received a call from the Governor of the Central Bank of Kenya (CBK), who told me that there was something that he wished to share with me, as the Prime Minister, concerning the adverse stories appearing in the media around that time. I met him in my office the same evening. The Governor presented to me an eight-page undated and unsigned typed document, which purported to give a background to the CBK's involvement with Mr. Kamlesh Pattni, and the case of the Grand Regency Hotel, in which the Bank had a charge over the land and buildings. I will be placing this document, and others in my possession, on the Table of this House. Mr. Speaker, Sir, the document noted that the Bank had held a Board meeting on 7th April, 2008 to chart the way forward. It stated that the Libyan Government was very eager to have a foothold in the hotel industry, and that consultations had been ongoing at the highest levels of the two Governments, where it had been agreed that the Libyan investors be encouraged to purchase the Grand Regency Hotel when the opportunity arose. The investors had agreed to buy the Hotel as a going concern, and at the market value. The Governor told me that a deal had been concluded on 23rd March, 2008 with the Libyan investors, who had paid a 10 per cent of the purchase price of US$45 million, but the deposit was not made until 8th May, 2008. That was the narrative according to the Governor of the CBK. The Minister for Finance, on his part, on 29th April, 2008 told Parliament that the Hotel had not been sold. He informed the public that the Hotel would be sold through a public auction. This was the rapid rebuttal from the Minister of Finance. I then began reading in the media open contradictory statements from the Attorney-General, who said that he did not know anything. The Director of the Kenya Anti-Corruption Commission (KACC) said that they had repossessed the Hotel. Mr. Kamlesh Pattni said that he had handed over the Hotel and was given amnesty. There were several contradictory statements, which made the Government look very bad. On 25th April, 2008, two days after my meeting with the Governor of CBK, I directed my Chief of Staff to write to the Director of KACC. In that letter, I requested information on the following: the status of the receivership account relating to the Hotel, the status of pending civil suits filed by the Commission against Mr. Kamlesh Pattni and his co-defendants, the surrender and transfer documents, the consent orders or extracted orders as might have been made, the counsel who had advised on and prepared the transaction documents, the breakdown of the transaction costs, how the transaction was being handled in the context of the Privatisation Act, and all other relevant documents, including correspondence exchanged over the transaction. The letter was copied to the Attorney-General, the Minister for Finance, the Governor of CBK and to the Head of the Public Service. Mr. Speaker, Sir, on 12th June, 2008 I received a reply from the Director of KACC confirming that the Grand Regency Hotel had been received as recovered from Mr. Kamlesh Pattni's Uhuru Highway Development Limited and been handed over to the CBK. Attached to the letter was a copy of the court order issued under Civil Suit No.111 of 2003, instituted under the Anti-Corruption and Economic Crimes Act, showing that a settlement had been reached between the bank and Mr. Kamlesh Pattni regarding the handing over of the Grand Regency Hotel in exchange for the Bank's abandoning all claims against Mr. Kamlesh Pattni and all other defendants in the case. However, the KACC did not furnish me with all the documents as per my request 1676 PARLIAMENTARY DEBATES July 8, 2008 of 25th April, 2008. I was thus forwarded partial evidence but not all of it. So, I could not make an informed assessment. What precipitated my action to call a Cabinet Committee on Finance, Administration and Planning, was the Minister of Land's discovery that transfer of the ownership of the Hotel had been mysteriously effected on 25th June, 2008; he gave a Press briefing to that effect on the same day. Mr. Speaker, Sir, on 27th June, 2008 the Minister for Finance, for the first time, acknowledged that, indeed, the Hotel had been sold. At a meeting held on 1st July, 2008 a Cabinet Committee constituted a technical sub-committee, with the mandate to collect and review all available documents and records relating to the sale of the Grand Regency Hotel. The sub- committee reported back on 1st July, 2008 and by that time, this House had carried the Motion of No Confidence in the Minister for Finance. The Committee's deliberations, observations and findings compelled them to make recommendations that the Minister for Finance and others be directed to step aside until in-depth investigation on the purported sale are carried out. Mr. Speaker, Sir, I am pleased that the Minister for Finance has deemed it important to step aside. This is an honourable action, for which I commend him. It is not often that people take responsibility and agree to step aside. The action that the Minister has taken is an action which is precedent-setting. I wish to inform the House that investigations are going to be carried out thoroughly on this matter, and if the Minister is found to be innocent, appropriate action will be taken, both ways. Let me, at this juncture, say that the Government values the Libyan investment, and that we have no quarrel with the Libyan Government. As I stated, the Libyan investors were willing to buy the Hotel as a going concern and to pay the market value. In fact, the Libyan investors are not only interested in hotel developments, but have also expressed interest in refinery, pipeline and other infrastructural projects. I wish to assure the Libyan investors that the Government is committed to resolving the sale of the Grand Regency Hotel in a transparent and mutually agreeable manner. As this crisis was raging on, in the last two weeks, I also heard that some of our development partners were considering withdrawing financial support and development assistance. I wish to inform the House that yesterday I was phoned by the Deputy Head of the World Bank regarding a programme for the Northern Corridor development. The extension from Molo, through Kericho to Kisumu, was supposed to be put before the Board of Directors for the World Bank this week. He told me that because of the developments in the country right now, they were removing it from the agenda until the matter is settled. The news headlines that Kenya was back to business as usual, where financial transparency and accountability are just meaningless words, may also have deterred potential investors from coming to Kenya. Well, my message to them is that this is a new Kenya, where people regardless of their status, are accountable for their action. Justice for all, but not the chosen few remains our motto. Mr. Speaker, Sir, the establishment of good governance, that is the practice by the political leadership of accountability, transparency, openness, predictability and the rule of law is widely accepted as a critical element in securing stable economic development for market-oriented growth in our country. Governance is not necessarily limited to Government in which all public affairs are conducted, for instance, in the economic sector. Good governance depends on the extent to which a Government is perceived and accepted by the general citizenry, to be legitimate and responsive to the needs of the citizenry; competent in ensuring law and order and in the delivery of public services and equitable in its conduct, favouring no special interests or groups. Achieving good governance and overcoming the practices of profligacy and corruption inherited from the past, is one of the most important challenges facing the country and our Government of the Grand Coalition. July 8, 2008 PARLIAMENTARY DEBATES 1677 But in facing these challenges, we must not be shackled by the fear of being perceived to be corrupt in pursuit of genuine opportunities to enhance our economic development. What do I mean by this? I mean that we must be transparent in whatever we are doing. Sometimes, somebody can be acting in very good faith and following transparent methods of doing business. He should not have any fear that he will be perceived to be corrupt. Mr. Speaker, Sir, in conclusion, as I said sometimes last week, this Government will not condone any kind of act of corruption. I say this on authority of the Government; that from the President, the Prime Minister down to Assistant Ministers and clerks in the Government, nobody is indispensable."
}