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Nairobi Hospital saga: Why owners want the entire board recalled

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The main entrance at The Nairobi Hospital. 

Photo credit: File | Nation Media Group

The wrangling at Nairobi Hospital has taken a new turn as members of the Kenya Hospital Association (KHA), the organisation that owns the hospital, have called for an extraordinary general meeting to remove more than 10 directors from the board, citing a loss of confidence in their leadership.

In a petition addressed to the board of KHA, members of the requisition group listed 13 directors, including chairman Chris Bichage and vice chairman Philemon Mwaisaka, alleging that they have failed in their legal and fiduciary duties to the company and its interests.

"The cited failures of the board include, but are not limited to: collectively passing resolutions to accept and issue tenders contrary to the hospital's procurement manual, to be financed by offshore borrowing of astronomical sums of an estimated Sh2 billion, using the company's assets as collateral without informing or obtaining the approval of the members, without considering alternative financing, thereby jeopardising the company's assets and in fact the existence of the company should the company be unable to repay the astronomical proposed loans," reads the petition drafted by the KHA requisition committee.

"We, the undersigned, representing more than one-tenth of the total voting rights of all members of the Kenya Hospital Association (the company) entitled to vote at the general meetings of the company as at the date of this letter, hereby serve and request you in terms of article 18 of the company's articles of association and section 277 of the Companies Act, 2015 to convene an extraordinary general meeting of the company for the purpose of removing the unlisted directors from the board," it added.

The members have faulted Dr Bichage and Mr Mwaisaka for failure in leadership and, management of the company, which involved leading and presiding over meetings of the Board of Management in making resolutions that have been against the company’s Articles of Association, Human resource manual and procurement manual. 

In addition, the duo has been accused of acting in serious conflict of interest and in contravention of the Articles of Association of the company, by conducting business with the company using proxy companies and failure in leadership and management of the company, resulting in serious decline in performance, revenues, efficiency and brand standing of the hospital.

“In those premises, the Hon. Dr Chris M. N. Bichage and Mr Philemon Mwaisaka are not suitable to continue as a director and or chairman of the Board and vice chairman of the Board respectively,” the petition read in parts.

As the chair of the human resources committee of the board of management, Barcley M. Onyambu has been accused of presiding over irregular employment of staff at the Hospitals, based on tribalism, nepotism, and cronyism, and in contravention of the company’s human resource manual and board charter.

Others directors include; Dr David Githanga, Dr W. Irungu Ndirangu, Dr Magdalene Muthoka, Mrs Ludmilla Shitakha, Dr Fred Kambuni, Dr Mbira Gikonyo, Hon Philip Waki, Prof. Herman B Manyora, Prof. John Mwero and Mr Geoffrey Ng’etich.

To this effect, the member of KHA has maintained that it was urgent to scrap off the entire board to help salvage the Hospital before it is declared insolvent.

“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.

According to the KHA board requisition committee, the recalling of the directors has reached an advanced stage despite a continuous threatening letter from the company’s secretary of KHA, Gilbert Nyamweya, under instruction from the current board chairman.

In a letter dated July 1, 2024, seen by this publication, the committee, through its lawyer Ahmednasir M Abdullahi, SC has already written to  Mr Nyamweya to unconditionally and immediately desist from interfering with the ongoing process for the recall of an extraordinary meeting terming it a legal process.

"We are now at an advanced stage in the process of recalling the KHA board. However, we are also aware of the ongoing threatening letters from the company secretary of KHA on the instructions of the current chairman of the board that we are recalling.

These are just threats with no legal substance. It is a desperate attempt by the board to avoid a legitimate recall by KHA members. The recall has followed due process as set out in the Companies Act and is therefore valid," the committee said.

In the latest development, in a public notice, KHA has issued a stern warning to Kenyans about a fraudulent syndicate of individuals posing as Nairobi Hospital employees.

In the advisory advert placed by the association, it warned that the individuals were unlawfully soliciting members’ personal data with the individuals operating out of various hospitality establishments in Nairobi, misleading the public. 

"KHA wishes to disassociate itself from this syndicate of individuals and their unlawful solicitation of KHA members' details. Please report any such solicitation of your details to the KHA office for action by law enforcement agencies," the advert advised. 

In the same advert, the association published pictures and names of two former employees, Mr Victor Opiyo Miseda who was the Chief Operations Officer at the hospital and Engineer Shammah Kiteme, who was the Chief Engineer. 

The warning indicated that the two ceased to be employees of Kenya Hospital Association trading as the Nairobi Hospital with effect from June 12th and June 30threspectively and they are therefore not authorized to transact any business in the same of or on behalf of KHA. 

"Any person who deals with the two or their agents or servants as an apparent representative of KHA or the hospital does so at their own risk. We advise our stakeholders, including KHA members and the general public, to act with caution and disregard any communication made by the above person on behalf of the hospital," the advisory warned.

 The hospital's CEO James Myamongo confirmed that the suspects had ceased being employees of the hospital. He told Nation that having occupied sensitive dockets it was necessary to issue the notice.

He assured the hospital's stakeholders and staff that the situation was under control.

"We assure all our stakeholders and staff that the situation is under control and we request calmness as the law takes its course. The Main Hospital and all our Outpatient Centers are running smoothly as we offer patients the best care using advanced technology in an atmosphere of trust, safety and comfort," he said.

Speaking to this publication, Robert Shaw, the former board member of KHA, attributed the move, to a campaign to silence and intimidate the competent practitioners who have always not been not bowed to intimidation, and also scare the few doctors who form the minority of the employed doctors in the hospital.

"They are very competent and independent people. So the move is just to threaten them while the management is trying to stop the process of recalling the directors. Most of the doctors are not employees of the hospital, they are consultants," Mr Shaw said in a telephone interview.

To successfully recall the board of management, the members need a minimum of 300 signatures, which Mr Shaw says has already been attained.

In its latest report in the financial year ended December 2022, Nairobi Hospital made a loss of Sh564.7 million attributing the loss to a fall in patient numbers.