PR Firm Redhouse Group Declared Bankrupt After Failed Rescue Efforts

High Court orders liquidation of once-prominent marketing communications agency following administrator’s unsuccessful turnaround attempts

A High Court judge has ordered the liquidation of Redhouse Group, one of Kenya’s established public relations and marketing communications firms, after efforts to rescue the company from financial distress proved unsuccessful.

Justice Francis Gikonyo issued the liquidation orders on Saturday following a report from the court-appointed administrator who declared that attempts to revive the company or maintain it as a going concern had been fruitless.

The official receiver has been appointed as the provisional liquidator to oversee the winding up of the firm’s affairs.

Financial Difficulties Seal Firm’s Fate

The company had been under administration since September 2023 when directors issued an insolvency notice, acknowledging that Redhouse had encountered financial difficulties that were “essentially affecting the running of its day-to-day activities.”

Ms Diana Mumo, a senior assistant official receiver, informed the court that the company had become insolvent with no likelihood of recovery. “In my view, the firm ought to be placed under liquidation to undergo an orderly winding up of its affairs and to achieve the best possible outcome for the creditors,” she told the court.

The administrator’s term had automatically ended on September 28, 2024, with the liquidation process now set to begin. Under the liquidation proceedings, the provisional liquidator will trace, collect and preserve the company’s assets, including trade receivables, to maximize returns for creditors.

Creditors Left Unpaid

The court heard that despite formal demands from known creditors and the filing of proof of debt forms, the administrator was unable to satisfy any of the claims against the company. The inability to pay creditors, including preferential creditors, stemmed from incomplete asset collection processes that prevented substantial payments.

Mr Andrew Maxe Smollo confirmed through an affidavit that he had served creditors with the liquidation application through their known email addresses on January 30, 2025. The judge has now ordered that creditors be formally notified through advertisements in the Kenya Gazette and a newspaper of nationwide circulation.

Rise and Fall of a Marketing Pioneer

Redhouse Group’s journey from industry disruptor to bankruptcy illustrates the volatile nature of Kenya’s marketing communications sector. Founded in 2012, the company quickly established itself as a significant player in integrated marketing communications, offering strategic planning, creative design, advertising, and digital marketing services across East Africa.

The firm’s early expansion was aggressive and ambitious. In its first year of operation, Redhouse acquired the advertising subsidiary of joint venture Media Edge Group in a multi-million shilling deal. The acquisition brought key personnel including Ms Esther Ngomeli, founder of Media Edge Group, who became one of Redhouse’s two directors alongside Mr Koome Mwambia.

Global Partnerships and Regional Ambitions

The company’s most significant breakthrough came in November 2013 when Redhouse Advertising acquired the TBWA Worldwide license in Kenya. TBWA Worldwide is an international advertising agency group with head offices in New York, with its Africa operations coordinated from Johannesburg, South Africa, and is part of the Omnicom Group.

This partnership positioned Redhouse to compete with established agencies like Scangroup and gave the company access to international clients and global advertising standards. At the time, the company expressed ambitious plans to develop an integrated marketing communications footprint across Kenya and the broader East African region, including Uganda, Tanzania, Rwanda, and South Sudan.

Warning Signs Emerged in 2023

The first public indication of Redhouse’s financial troubles surfaced in September 2023 when the company filed for insolvency, with directors Mwambia and Ngomeli signing an insolvency notice that appointed the official receiver as administrator.

The company’s website now displays only a message stating “Site will be available soon. Thank you for your patience!” – a stark contrast to its once-active online presence.

Industry Impact and Broader Context

Redhouse Group’s collapse reflects broader challenges facing Kenya’s marketing and communications industry, which has seen several established players struggle with changing market dynamics, digital transformation costs, and economic pressures.

The liquidation comes at a time when other financial services companies like Resolution Insurance have also entered liquidation after failed rescue attempts, suggesting systemic challenges in certain sectors of Kenya’s economy.

What Happens Next

The liquidation process will now proceed with the official receiver working to realize the company’s remaining assets for distribution to creditors. The court has directed that all stakeholders be properly notified through official channels, and creditors will have the opportunity to file their claims through the formal legal process.

For the wider marketing communications industry, Redhouse’s demise removes a player that once challenged established agencies and brought international standards to the Kenyan market. The company’s former clients will need to find alternative service providers, while employees face uncertain prospects in a competitive job market.

The case serves as a reminder of the challenges facing businesses in Kenya’s evolving marketing landscape, where companies must balance growth ambitions with financial sustainability in an increasingly competitive and digitally-driven marketplace.