Court Halts Nairobi Hospital Procurements, Threatening Operations

The operations at Nairobi Hospital are at a risk of being halted after the high court issued temporary orders barring the management from undertaking any procurement or taking a loan to run the hospital.

This is after Samuel Muthamo Muchiri moved to court last week suing the Kenya Hospital Association trustees for allegedly running the company down.

On Thursday Justice P Mulwa issued orders suspending the implementation of the Resolutions on election of Directors of the Board of Management and of elections of Trustee of the Kenya Hospital Association of 4th December 2024, pending hearing and determination of the application inter parties or until further orders of the Honourable Court.

Further, the trustees have been barred from borrowing for any Capital Expenditure for Kenya Hospital Association, and or offering; executing or in any manner whichsoever using the assets of the Interested Party as collateral for a loan.

“A temporary order of injunction be and is hereby issued restraining the 1st Defendant, whether by itself, agents, employees or anybody whosever acting on the 1s Defendant’s behalf from engaging in any form of Capital Expenditure, including equipment purchase, furniture and fittings, upgrade, and maintenance of physical assets such as property, plants, buildings, technology, or equipment, settling pending bills, spending on any new procured projects, any ongoing projects, and undertaking new projects or investments, pending hearing and determination of the application inter partes or until further orders of the Honourable Court.l,” the order reads.

The Hospital has also been barred from floating or concluding any procurement of Capital services and Projects pending hearing and determination of the application inter parties or until further orders of the Honourable Court.

Further, they have been temporarily barred from liquidating, encashing, or in any manner whatsoever utilizing or applying the funds belonging to and held by the Interested Party, Kenya Hospital Association, in Fixed/Call Deposits, Treasury Bonds, Infrastructure Bonds and Provident Fund, and or where liquidated from applying funds therefrom, wherever held, pending hearing and determination of the application inter parties or until further orders of the Honourable Court.

In the court papers, Muchiri has accused the board of committing serious acts of malfeasance in breach of the duty to act for success of the company and duty to exercise reasonable care, skill and diligence as obligated by the law.

He says that as a result of this the hospital has lost Sh 1.1 billion with a debt to supplies of nearly Sh 3 B.

He further says the trustees intend to borrow off shore Sh 4.2 billion using assets of the company as collateral which will drive the hospital to insolvency.

The trustees Prof Githu Muigai, Jane Nyakang’o, Prof Donald Orinda, Dr Meshack Onguti and Celia Ngalyuka have also been sued.