Will Kamlesh Pattni’s court victory encourage Uhuru and Ruto on ICC cases?

"Magnate"

Obviously this is an irreverent question, and not the sort of thing that could be countenanced in academia or in diplomatic circles. But I just couldn’t help myself since I write about practical realities in politics and governance here, while watching the podcast of Maina Kiai and Joel Barkan discussing the “Implications of the Kenyan Election” @NED and a question from the audience has inquired about the latest Pattni ruling.

Last week we learned that Kamlesh “Paul” Pattni, one of Kenya’s wealthiest “men of business” (not like Uhuru, apparently, but very wealthy) had been the beneficiary of a big legal breakthrough as the media reported that High Court Justice Joseph Mbalu Mutava had ruled back in March that Pattni could not be prosecuted in the trial courts for the notorious Goldenberg corruption scandal.

“Judge defiant after clearing Pattni of Goldenberg scam”

The judge also observed that the report by Commission of Inquiry chaired by former Court of Appeal judge Samuel Bosire on the scandal on which the existing criminal case was anchored is flawed and that most witnesses had died or their memories have faded.

Pattni moved to the High Court in August last year seeking to quash the criminal proceedings at the magistrate’s court and stop the State from further criminal prosecution on the scandal estimated to have cost Kenya billions of shillings.

On Pattni’s prayer that the media be barred from reporting on the case, the judge said that the court could only intervene to set parameters of reporting to protect someone’s rights.

Last November, Justice Mutava’s conduct was put to question in a petition filed against him by Havi and Company Advocates on behalf of the International Centre for Policy and Conflict (ICPC). It sought to have the judge removed from office over his handling of the Pattni cases.

ICPC had argued that the whole matter had not been handled through the correct procedure and some court orders made were outside of the law.

The petitioner had faulted the judge’s handling of the case and accused him of being part of “an orchestrated cover-up to aid and abet Pattni’s criminal conduct”.

Justice Mutava was later transferred to Kericho from where he wrote the controversial judgment on Mr Pattni’ application for the case to be scrapped.

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Impunity Wins Again under GNU?: Business Daily reports “Pattni Gets Last Laugh in Grand Regency Saga”

The Big Story in Nairobi’s Business Daily reports the “closing yet another window for recovering billions of public money lost through the fraudulent gold export scheme” Goldenburg.

The newspaper has reviewed the reporting of the Central Bank of Kenya and discovered that it has written off Sh1.5B that remained due from a loan secured solely by the former Grand Regency Hotel.

The Business Daily reveals that the Cockar Report–delivered to President Kibaki but yet to be made public–concludes that the sale process was “flawed”, “secret” and “hasty”. The price received appears to reflect a gross undervaluation in that it could have been realized 13 years earlier–who thinks this hotel in downtown Nairobi was worth the same in the early 90s as in the late 00s?. Further, it appears that the Cockar Reports identifies a bidder who would have paid significantly more than the Libyan firm Laico–in fact an amount that would have paid the debt to the CBK in full!

The context: “Another commission, headed by Justice Samuel Bosire, concluded in a 2006 report that Kenya’s economy could have lost a total of Sh158 billion in the Goldenberg Scandal through a web of transactions that involved 487 companies and individuals.”; “Mr Kamlesh Pattni, who was named as a key player in the scam is understood to have surrendered Grand Regency to CBK in a ploy for amnesty from prosecution in the Goldenberg cases.”

Kudos to Business Daily Africa for diligence and solid reporting. Let’s hope they follow-up (in spite of the pressure I am sure they will receive not to).

Since I was working in Nairobi while this was ongoing, I can say that it was an open and obvious scam just from the basic issues that are apparently identified in the Cockar Report: secrecy, haste and an inexplicably low price.

The next question: Why? (in other words, who benefited?). Was this just a charitable impulse to transfer wealth from the Kenyan public to a group of private Libyan investors? Hard to imagine! What reason would the CBK have for selling to Laico for an amount that left a deficiency on the Pattni loan of Sh1.5B if another bidder was willing to pay the full amount and the hotel was probably worth even more? This would benefit neither the creditor nor the debtor. Did the buyers really pay more, in cash or other interests–just to someone else? Why the “haste” after so many years? Certainly the rumors at the time where that the dealmaking was wrapped up in the non-transparent financing of election expenses.

And why do we not have answers now?

As far as Pattni himself goes, it was interesting to see Pattni seem to spend quite a lot of money on his own Parliamentary campaign in Nairobi while getting few votes–and also see his “party” active elsewhere.

A basic rule of financial fraud that I have observed over many years is that if you want to steal and maximize your chances of keeping a whole lot of it if you get caught is that you should steal so much that you have plenty to spread around to “buy peace” afterwards. Sort of “the audacity of greed”.