Calls Mount for Kenyan Finance Minister to Resign Over Hotel Sale

Calls continue to mount for Kenya's finance minister to step down over the sale of a luxury hotel in Nairobi. As Derek Kilner reports from the Kenyan capital, critics say the hotel was sold for a price far below its value, reviving concerns about corruption in a country that has long struggled with issues of graft.

Cabinet ministers, members of parliament, non-governmental organizations and newspaper editorials have called for Kenya's Minister of Finance Amos Kimunya to resign, following news of a secret deal to sell the Grand Regency Hotel in downtown Nairobi.

Kimunya, who was appointed by President Mwai Kibaki in 2006, approved the sale of the hotel to a state-owned Libyan company for about $45 million. Kimunya says the price was above the property's official valuation, but critics say the estimated market value is at least $100 million, more than the selling price.

The deal has been condemned by leaders from the president's coalition, to which Kimunya belongs, as well as the Orange Democratic Movement, the party of Prime Minister Raila Odinga who challenged President Kibaki in last year's disputed elections before joining a unity government.

The Minister of Nairobi Metropolitan Development Mutula Kilonzo, a Kibaki ally, urged Kimunya to resign, saying the price of the sale was "laughable".

Minister of Land James Orengo, an ally of Mr. Odinga who exposed the deal, called the sale "fraudulent" and "mafia-like." Another Odinga ally, Minister of Agriculture William Ruto called the deal a "farce."

Kenya's The Nation newspaper said in an editorial that the deal "stinks to high heaven." Anti-corruption organizations, including the Kenya chapter of Transparency International and the Mars Group have called for an investigation.

Mars Group chairman Mwalimu Mati says the sale was either vastly undervalued or is hiding deeper misconduct.

"The second and perhaps the more intriguing suggestion is that the sale price recorded is only a fraction of what was paid, and if that is the case, then that would be very, very illegal," said Mati. "In fact, he is being accused of having a secret interest in the undisclosed part of the sale price, which amounts to several billion shillings."

The hotel was owned by Kenyan businessman Kamlesh Pattni who was at the forefront of a scheme in the 1990s to defraud the government of $1 billion through nonexistent exports of gold and diamonds. The case became a symbol of Kenya's troubles with corruption.

In April, Pattni turned over the hotel to Kenya's Central Bank, in a deal with the state-run Kenya Anti-Corruption Commission that many believe gave him immunity from further prosecution. Calls have also surfaced for the heads of the Central Bank and the Anti-Corruption Commission to step down.

Even ministers and members of parliament from Mr. Kimunya's home region of Central Province, who often stick together, have distanced themselves from the finance minister.

Mati, of Mars Group, says there are suspicions of wider government involvement.

"I think we should be very concerned that a minister of finance, knowing how much attention there was on him would be so brazen," said Mati. "The questions Kenyans usually ask are who has the audacity to defy all these institutions unless it is somebody who has higher protection. So the direction of attention is now starting to go up, and upwards in this case would be to the appointing authority, the president. So I think we have got a scandal that is yet to totally come to boil. I actually suspect that this is just the tip of the iceberg."

A group of lawmakers has said it will launch an effort to censure Kimunya in parliament, which would force his resignation.

Prime Minister Odinga, who campaigned last year on a pledge to fight the corruption of the previous Kibaki government, has said he will call a cabinet-level meeting on the subject this week.

Kimunya has remained defiant, saying he should be congratulated for bringing in government revenue and dismissing complaints as "propaganda".