Laico Regency, Gaddafi’s grand project of tears and mischief

This week, some employees of Laico Regency – one of the late Muammar Gaddafi’s signature business projects in Africa assembled at Uhuru Park in a low-key demo. They were, and some in tears, demanding their salaries after many months of false promises.

Laico, unlike others hotels which have gone through business turmoil, is not a victim of Covid-19 pandemic. Rather, it is an indicator of what befell the Gaddafi projects that were strewn across Africa as he tried to mark his sphere of influence.

Before he was ejected, chased and killed by Nato-backed forces, on October 20, 2011, Gaddafi had founded the Libyan African Investment Company (Laico), which was to invest the billions of petro-dollars from the oil industry in various entities – some of which were based in the tax havens of British Virgin Islands, Malta, and Lichtenstein.

Attempts to unravel these networks and Gaddafi’s wealth have always hit a hitch. When Gaddafi’s former prime minister and oil chief defected in 2012 and became the person who could help trace the assets, he was found dead in River Danube in Austria where he had taken refuge. That was before he could provide any information.

The acquisition of former Grand Regency Hotel was part of this history of foreign investments by Gaddafi-controlled networks. In Kenya, it became a controversial sale that led to the resignation of former Kibaki Finance minister Amos Kimunya, who was accused of lying to a House Committee in a spirited campaign led by Boni Khalwale.

Laico Regency has since been regarded as one of the cryptic investments which were managed by Gaddafi’s inner-circle under the umbrella of the multi-billion dollar Libya Africa Investment Portfolio (LAIP).

So why have the workers not been paid and what has happened at Laico Regency? The story is, perhaps, deeper than a management saga.

After Gaddafi’s death, most of the projects under Laico were snatched and sold by various entities which took advantage of the lawlessness in Tripoli where power kept on shifting. For many years now, the UN-backed Government of National Accord (GNA) has been struggling to recover most of the Libyan entities abroad and which ended up in the hands of Tripoli power-brokers.

For instance, six months ago, Laico took back Tanzania’s 24-acre Bahari Beach Hotel, which was built in 2003 by Gaddafi from the shells of the failed Mwalimu Nyerere tourism projects. Apparently, the last Libyan managing director changed all the ownership documents and transferred the 110-room hotel to his name. It took the intervention of the Tanzanian government to hand back the hotel to Laico.

Back in Nairobi, there have been various shifts in the Gaddafi businesses and it is not clear which of the various factions in Tripoli have been in control of the Kenyan assets. At one point, Parliament was told that Laico Regency was not registered in Kenya and it was hard to tell who the directors were.

Gaddafi’s sphere of influence

The problem is that Laico Regency was sitting at the tail-end of a network and was part of the Libya Africa Investment Portfolio, a State-owned investment fund, and which in March 2011, was blacklisted by the UN Security Council Committee as one of the entities which provided funding for Gaddafi and his cronies.

LAIP, on paper, was a subsidiary of Libya Investment Authority, which was regarded, in some quarters, as a mechanism in which Gaddafi wanted to invest billions of dollars in African countries and establish himself as a formidable figure in the continent.

At its head was Bashir Saleh Nashir, the man christened Gaddafi’s banker, and who served as Libyan leader’s right-hand man and Chief of Staff. He is the man who called a press conference in Nairobi and revealed that the Libyan entity had purchased Grand Regency Hotel for $45 million and claimed that they were eyeing a stake at Kenya Pipeline Company.

That was at the time that the Libyan leader had managed to convince Presidents Mwai Kibaki and Uganda’s Yoweri Museveni to let Libya build the Eldoret-Kampala Oil pipeline. Tender for the project had been awarded to Tamoil East Africa Limited, which had also promised to invest US$300 million in upgrading Mombasa's refinery besides winning the rights to build a US$60-million liquid petroleum gas (LPG) storage facility in Mombasa.

Most of these would come a cropper after the death of Gaddafi. However, such deals do not come without a broker and the man at the centre of the Nairobi-Tripoli alliance was the late Alex Muriithi – the Narc director of elections who loved to introduce himself as Alex Kibaki. As the president’s nephew, the burly and bearded man had visited Tripoli, apparently to deliver a letter from State House, shortly after Narc came to power.

Kenya was, by then, the missing link in Gaddafi’s sphere of influence and the Libyan leader was hoping that after Moi left power, he would have an easier time in East Africa.

Moi, perhaps out of personal paranoia, or under the influence of western intelligence, had always suspected Gaddafi’s as harbouring evil intentions against the Nyayo regime. He had since the 1980s been accusing Libya of training young men as guerillas to overthrow the government. His other suspect was Yoweri Museveni.

At the time Muriithi and his team were in Tripoli, Gaddafi had agreed to surrender his weapons of mass destruction in return to restoration of full diplomatic relations by western states. He had also handed over suspects of the Lockerbie bombings, what led to the lifting of economic sanctions.

It was a small price to pay to have the shackles out, and to have Libya ditch its pariah status. After Gaddafi had agreed to pay compensation to the victims of the 1988 Pan Am 103 Lockerbie bombing – which was blamed on his ally Abdelbase al-Megrahi – political power brokers and merchants trooped to Tripoli looking for business and opportunities.

In March 2003, Libya had surprised everyone after they submitted an official request to join Comesa at its eighth Heads of State Summit. A chance to do business had been opened and all the Comesa nations agreed to let Gaddafi in – after all, he had the petro-dollars and there were hungry politicos, all over.

The Libyan leader knew how to work the commercial and political game. In February 2007, Rex Tillerson, then global chairman of ExxonMobil visited Tripoli to attend the signing of an energy exploration venture. It was here that the decision to sell ExxonMobil Kenyan stations to Libyans was made. (Tillerson is the man who until 2018 was Trump’s Secretary of State and dismissed the US President as a moron – by saying: “What was challenging for me was coming from the disciplined, highly process-oriented ExxonMobil corporation (was) to go to work for a man who is pretty indisciplined, doesn’t like to read, doesn’t read briefing reports, doesn’t like to get into the details of a lot of things, but rather just kind of says, ‘This is what I believe.”

Tricky global ventures

And that is the man who agreed to sell his Kenyan businesses – a network of 64 retail service stations, a blending plant for lubricants in Mombasa, the aviation business, terminals at Mombasa and Nairobi and fuel depots in Nakuru, Eldoret and Kisumu to Gaddafi.

Locally, it was a simple sale between Mobil Oil Kenya and Tamoil Africa Holdings-Limited, and what Kenyans saw was a new entity known as Oilibya. After the conclusion of the Kenyan deal, Exxon Mobil Corp. signed an Exploration and Production Sharing Agreement with Libya's National Oil Corp. to explore offshore Libya in the Sirte basin, an area covering 2.5 million acres.

It was in these tricky global ventures that Grand Regency was purchased in a deal which featured the law firm of Wetangula Adan Makokha Advocates. While a deposit of $4.5 million had been deposited in CBK’s Federal Reserve Account in New York, and the local law firm had confirmed involvement, Kimunya had insisted that it was not sold.

But the issue was not so much about Gaddafi’s grand project, which was lost in the argument, but on whether the Libyans paid for the value. Finally, it became a battle within Kibaki’s coalition government with James Orengo, the Lands Minister and Mr Kimunya pulling on different sides.

While a commission was appointed to probe the sale, it did not make any headways. Neither Central Bank nor Pattni were truthful on how they started negotiations. CBKs position was that it all started when they received a call from Protocal Office and were informed about an impending visit by the Libyan ambassador on September 11, 2007.

Pattni said he first heard about the proposed sale after Kibaki’s visit to Tripoli in feigned ignorance of a letter he wrote to his advocates, Wetangula Adan Makokha and Co, on September 13, 2007 instructing them to commence negotiations with the Libyans.

Interestingly, it was Pattni’s lawyers who incorporated Libyan Arab Investment Company Kenya Limited.

“The speed at which the company was incorporated is strikingly similar to the speed at which the hotel was transferred,” said the commission probing the sale.

While registering the document, the two shareholders were listed as Kenyans but when CBK entered into agreement for the sale of Grand Regency, they turned out to be Libyans.

Now, the hotel workers are stranded while dealing with an entity whose tail is in Kenya but the entire body seems to be in Tripoli. Laico has become the grand citadel of tears.

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