The Kenya Red Cross has pinned its financial woes on delayed payments, denying claims that it has failed to meet its loan obligations.
In a statement to the press, Kenya Red Cross Society Abbas Gullet said that its Boma Inn Nairobi facility had no loan obligation while the Boma Inn Eldoret was up to date with its loan repayment.
“Hardest hit has been the Boma Hotel Nairobi. Indeed, the hotels are also owed money for services delivered but not paid for,” he said. “Faced with these realities, the Red Court has gone into a process of administration.”
The humanitarian organization was placed under receivership for what is alleged to be failure to repay loans owed to National Bank of Kenya.
After taking over NBK, KCB Group vowed to go after loan defaulters, showing that the organization may have been one of them.
The administrator appointed by creditors to manage the institution’s three facilities P V R Rao barred the current management from handling any operations at the facilities.
“None of the directors, shareholders, employees and no other person is authorised to transact any business on behalf of the company without express written consent from the administrator,” he wrote in a notice.
Gullet defended the management team stating “no project funds had been channeled into the business adding that he was optimistic the appointment of an administrator would bring the hotels back to profitability.
“It is our belief that this decision will return the hotels to a profitable path to continue to serve their intended purpose of generating income for the Society,” he said.
In 2007, the Society ventured into the hospitality industry and built the Boma Inn Nairobi, a three-star hotel.
This was followed by the 5 star Boma Hotel Nairobi and another 3 Star Boma Inn in Eldoret opened in January and September 2013 respectively. The three hotels are run by the Red Court, a company set up by the Society to manage the its hospitality business.
