Nairobi hospital board and Kenya Hospital Association clash over alleged mismanagement
KHA demands Nairobi Hospital board resignation and accuses it of bringing the hospital to near-collapse.
The board of Nairobi Hospital has denied allegations of mismanagement by members of the Kenya Hospital Association (KHA), the organisation that owns the hospital. It said the accusations were "choreographed" and "out of frustration."
The KHA members accused the entire board, led by Dr Chris Bichage, of mismanaging the hospital and cited a loss of confidence in their leadership.
The members also gave the board an ultimatum to resign by September 16, or the doctors would down tools, potentially endangering the lives of thousands of patients by disrupting health services at the facility.
In response, Dr Bichage has remained firm that they have acted properly, suggesting that those tarnishing the hospital's reputation have questionable motives.
"I dare say that the allegations of corruption and poor governance being peddled are by individuals who have failed to manipulate our sound governance structures for their selfish gain and have now resorted to mounting a smear campaign against the Hospital," said Dr Bichage.
"We note with concern that a section of KHA members have needlessly resorted to inciting our members of staff due to their frustrations related to the extraordinary general meeting. There is scope within the company's legal framework for containing this incitement. Being a country governed by the rule of law, we are content that anyone seeking to violate the law shall face appropriate legal action," he added.
The members of KHA said on Monday that the hospital was experiencing a governance crisis and that they were taking steps to restore order through responsible management and protection of its assets.
"The hospital is in an Intensive Care Unit as it cannot pay suppliers, vendors, salaries, and doctors. The duty of care, loyalty, utmost good faith, confidentiality, financial discipline and prudence by the Board of Directors and CEO to Kenya Hospital Association members are glaringly lacking. These bad corporate governance practices have rapidly permeated the Hospital to near-total collapse. These have necessitated all responsible, progressive, and right-thinking members and shareholders of the Nairobi Hospital to take urgent remedial steps permissible under the law to save the Hospital from the precipice," they said.
The apex health institution has been in turmoil following two months of pressure from members of the requisition group. They accused the board of mismanagement, which has brought the hospital to the brink of collapse.
In July, the KHA board's requisition committee petitioned the KHA board, naming 13 directors, including Dr Bichage and deputy chairman Philemon Mwaisaka, and 12 others for mismanaging the hospital.
The allegations included passing resolutions to accept and issue tenders contrary to the hospital's procurement manual, seeking an offshore loan estimated at Sh2 billion, and using the company's assets as collateral without proper approval or consideration of alternative financing. These actions were seen as putting the company's assets and existence at risk if it was unable to repay the proposed loans.
"It is critically urgent and necessary to the removal of the Board of management and reconstitution thereof with a capable Board to save the Hospital and the company," read the petition.
The board, however, refuted the claim, saying that both the acquisition of equipment and the infrastructure projects were funded from internally generated sources and that no loan was taken to finance the investments.
In response to these allegations, KHA members are pushing for the removal of the entire board to save the hospital from insolvency. They called for an Extraordinary General Meeting (EGM) to remove the board and successfully obtained the required 300 signatures. The board then scheduled an EGM for September 27.
The hospital says that in the 2023/2024 financial year, Sh844 million was invested in medical equipment alone and Sh324 million in infrastructure projects.
The board says all pending projects have been completed except those in court or under arbitration. It has advised its partners to ignore claims that the hospital is drowning and could be declared insolvent.
"Nothing can be further from the truth, because independent audits by reputable firms speak to the contrary," said Dr Bichage.
However, in August, a letter revealed that three board members—Dr David Githanga, Dr W Irungu Ndirangu, and Ms Ludmilla Shitakha—had resigned under pressure.
The board has since taken legal action to prevent their removal and has obtained a court order to stop the circulation of a notice calling for their removal.
"The defendants/respondents, their agents, servants, employees and/or anyone acting on their behalf from circulating or disseminating, annexing, further publishing on any media, including social media platforms such as WhatsApp, Facebook, Instagram, Twitter or any other social media pages and/or relying on the same before any public forums or meetings…" read the Milimani Commercial Chief Magistrate court order issued on August 15.
