Leadership wars threaten to ruin Nairobi Hospital

Current board fights for survival in court, faces claims it has run down the once-premier health facility

In Summary

• The Nairobi Hospital, which prides itself on being the region's leading health facility, risks ruining its image because of vicious leadership feuds.

• The dispute involves money fights at the 67-year-old hospital whose gross income was Sh10.1 billion on December 31, 2017.

Nairobi Hospital
ON A SPOT: Nairobi Hospital
Image: FILE

A bitter lawsuit pitting two warring factions has exposed behind-the-scenes manoeuvres that have triggered a leadership crisis at the Nairobi Hospital.

According to documents in possession of the Star, the power games revolve around a withheld audit report said to be the smoking gun that would remove the current board chaired by John Simba.

The leadership battles rocking Kenya Hospital Association threaten the delivery of healthcare at the capital's premier public hospital. A new board headed by Irungu Ndirangu is pushing to assume office.

The Nairobi Hospital, which once prided itself on being the region's leading health facility, risks ruining its image because of power struggles.

The Kenya Hospital Association owns and manages the hospital through a board of directors elected by the association's membership.

However, the falling out at KHA has caused a management crisis likely to affect operations.

The board oversees the hospital management and makes strategic decisions on policy and investments. It exercises overall supervision of the facility.

The dispute involves money battles at the 67-year-old hospital whose gross income was Sh10.1 billion atfor the year ended December 31, 2017.

Of the amount, Sh1.7 billion was considered profit.

Also at the centre of the battle, are claims of nepotism in recruitment of staff, a multi- billion Anderson project complex whose cost is said to have been varied from an initial cost of Sh3 billion to Sh4.5 billion.

Critics of the current board argue that the bulk of the Anderson project has been on non-core areas like health and medical conference facilities as opposed to clinical areas like wards, theaters, pharmacy that should improve patient management.

Those pushing for the ouster of the current board accuse it of failing to release a forensic audit on procurement issues that they argue would unearth massive irregularities deeply-seated in the lucrative sector.

The forensic audit report on the affairs of the hospital spanning 6 years (2013-2018 was commissioned by the Board in 2018 and is said to have been completed sometime in April.

However, the outcome of the audit has largely remained shrouded in secrecy and its report, it would appear is being closely guarded.

At the same time, the current board is on the spot for mapping upwards the cost of consumable making the facility very expensive for clients.

However, the Simba-led team has denied the accusations and alleged that the Irungu team wants power through the backdoor.

It was against this backdrop that the a section of the members of the Kenya Hospital Association convened an extraordinary AGM on May 15 to oust the current board.

The over 200 members of the KHA had drafted a petition that forced for the extraordinary AGM whose agenda was to remove board chairman John Simba, his deputy Coutts Otolo — a former Mumias Sugar Company chief executive — and other board members.

They went ahead to elect new board members including Maxwell Odongo, Chris Bichange, Stephen Ochiel, Wilfred Ndirangu, Zahra Moi and Susan Charr-Hartley.

In the letter, the petitioners said they represent more than a tenth of KHA members with voting rights, the threshold for demanding the meeting.

The current board is being accused of holding up to sh200 million doctors' payments for the last 15 years.

“Even after the current board admitted to this and promised to make doctors payments by November 2018, this has not happened and remains a pipe dream,” wrote the petitioners who convened the extraordinary general meeting.

'Doctors' fees are always sacrificed whenever patients, corporates are short of finances to clear patients' bills. Senior consultants contracted last year to supervise registrars and junior consultants have not been paid or struggle endlessly yo have the same paid.”

But the current board battling the ouster bid argued that the extraordinary general meeting was irregularly convened.

“We would therefore like to notify the members of the KHA that the notice is invalid and any meeting held in the vicinity of the hospital under the said notice would be condoning an illegality and unlawful practice,” the board stated.

“The reason given for the requisition was too general and did not allow members to make an informed decision,” the board said in a statement released on Thursday.

“The signatures of the requisitionists were presented on several foolscap sheets of plain paper without the intended resolution clearly indicated on them.

At the heart of the disputes as well is the Board's decision to embark on grandiose construction with an annual budget of Sh 2 Billion.

The projects and works have transformed the hospital into one big shopping mall and construction site with state of art conference/health club facilities and eateries/banks.

However, critics of the board warn that patients are understandably unhappy with the noise and dust and lack of privacy due to too much non-clinical traffic.

The critics of the Simba-led board argues that, ironically, the planned and more pressing construction of operation theaters has not been prioritised despite the need to expand space.

“The ablution facilities in the theatres fall way short of acceptable standards with 1 toilet serving over 200 staff members,” warned the petitioners.

They added: “In view of the foregoing improprieties, the viability of the next expansion phase of the construction project cannot be entrusted to the same board. The entire project should be relooked at under the stewardship of a new board of management.”

On conflict of interest, the petitioners aver that in recent years the articles of KHA have been changed to allow board members to do business with the hospital.

“Some members of the current Board have taken full advantage of the lacunae. Severe conflict of interest and we now know that Board members’ family and friends have been employed in senior positions in the Hospital,”

An audit report by Ernst and Youn audit, released in August 2018, revealed a number of improper dealings among them bid to rig services.

The audit covered January 1, 2013 and October 31, 2016.

“We found four instances amounting to Sh91.2 million in which companies with common directors submitted bids under the same tender,” the report said.

The auditors also questioned the selling of a Mercedes Benz E300 and E350 to a senior official in 2014 and 2015 without the involvement of the disposal committee.

“The legal team informed us that its office did not have copies of the sale agreements,” the report says.

What started as a normal leadership challenge for the KHA, has spilled to the corridors of justice signaling protracted battles that could hurt the health facility's mandate.

The legal tussles could drag in court amid fears that the failure by the former board to hand over power to a new one.

Instead the ousted board led by Simba has moved to court and barred the new board from taking over until the case is heard.

The current board managed to obtain restraining orders on May 19 with the hearing of the case set for June 7.

sued a another faction allegedly installed after the contested extraordinary session mid this month, in what has triggered a standoff.

The High Court already issued a temporary order stopping the new board members chaired by Irungu Ndirangu from taking office, pending the determination of a case filed challenging their appointments.

The case was filed by the Kenya Hospital Association, together with former board members Simba, Coutts Otolo, Allan Gachukia, Sam Ncheeri, Charles Kariuki, Margaret Muigai and Anuja Kapila.