Two companies, which directors of the Nairobi Hospital have shares in, lost a lucrative tender to provide insurance for the institution after a re-evaluation ordered by the CEO before an all-out war for control of East Africa’s premier health institution broke out.
Since December last year, the private hospital has been at war with itself. Telltale signs began to show when now fired CEO Gordon Odundo reported to his office to find himself locked out on December 15.
Mr Odundo’s eventual dismissal on April 19 under unclear circumstances ignited a chain of reactions that last week ended up at the Milimani Commercial Courts. As it stands, the hospital has got two boards of directors, each claiming to be in charge.
One board, chaired by Mr John Simba, was dismissed by the Kenya Hospitals Association (KHA) on May 15 and replaced with another, whose first order of business was to select a chair. The board that was dismissed now wants the new board prevented from taking control of the hospital.
The KHA is an association of 2,500 members who own the hospital. The members who pay Sh10,000 to join qualify for discounts for services at the hospital. However, the loose ended nature of the membership has given the board an almost total control of a hospital that rakes in excess of Sh8 billion a year.
As a result, members of the board, as our investigations discovered, have for years used the opportunity to dish out jobs to their relatives and tenders for their companies in total disregard of hospital policies.
For instance the hospital’s communication’s manager, Mr Tom Simba, is a relative of chairman John Simba. However, the communication manager has not picked our calls or responded to this claim.
Additionally, the hospital’s secretary, Ms Mercy Mbijiwe, whose contract was renewed last year is a cousin to a board member, Dr Charles Kariuki. Ms Mbijiwe admitted this on July 4, 2018, when the CEO wrote to her asking about her relationship with Dr Kariuki.
“I declare that currently the only person related to me is Dr Charles Kariuki who is my cousin,” she said in response to the CEO.
“I would however like to state that at the time of my employment, I am aware Dr Charles Kariuki declared to the board that he was related to me and never participated in the interview in which the acting chief executive was also sitting,” she said.
This is, however, just a tip of the iceberg. Mr John Simba’s law firm Simba and Simba Advocates has represented Nairobi Hospital in court in four cases in the recent past according to documents in our possession. All the cases are interestingly about patients who had died and the hospital was either seeking compensation or orders to dispose of the bodies.
In the last case filed last year, the hospital was seeking an order to dispose of the body of a woman who had died after an emergency caesarean section and the family refused to pick the body.
Things, however, came to a head in December last year when Mr Odundo ordered for a review of insurance services provision tender in which companies that two directors have interests in bid.
The review done by the hospital’s internal auditor, Ms Maria Muthai, was released on December 11, just four days before the CEO was suspended.
Findings in the audit showed that the tender committee used questionable criteria to shore up the scores of Hawk Bay which had been recommended for awarding. Mr Sam Ncheeri, who is a board member at the hospital, is the CEO of Hawk Bay according to the company’s website.
Mr Coutts Otolo, also a board member, is the chairman of Clarkson Insurance Brokers which also bid for the insurance tender. Curiously, Mr Otolo is also a former chief executive of Ernst and Young, the company that in 2016 was hired to audit the financial transactions at Nairobi Hospital.
In her findings about how unscrupulous the insurance tender was awarded, Ms Muthai noted that Hawk Bay Brokers was awarded scores that were higher than merited.
