Government Statement on Nairobi Hospital Ownership Wrangles

1. Over the past several months, President William Ruto has received numerous communications from stakeholders regarding the Kenya Hospital Association (KHA), including doctors affiliated with Nairobi Hospital, who have raised concerns about the governance, financial management, and operational challenges faced by the institution.

2. These appeals raised serious concerns about the potential impact of longstanding governance and financial challenges on patient care, clinical governance, and the hospital’s operational stability.

3. In particular, stakeholders expressed concern about disputes relating to:

   • Disputes over KHA membership, Board elections, and subsequent Annual General Meetings • Ongoing financial mismanagement and allegations of mismanagement • Leadership challenges and internal wrangling • Disputes over the appointment of the hospital’s litigation

4. These concerns paint a troubling picture for a hospital that has long been regarded as one of the premier healthcare institutions in Kenya and the region, with a reputation for providing world-class medical services within Kenya’s healthcare system.

5. Established in the 1950s, Nairobi Hospital is owned and managed by the Kenya Hospital Association, which was established as a voluntary association incorporated under the Companies Act, 2015. Over the decades, this hospital has served as a beacon of hope for many Kenyans, offering specialized medical services and training opportunities for local and international health professionals.

6. For these reasons, Nairobi Hospital remains an important partner in the delivery of specialized healthcare services and in the advancement of Kenya’s healthcare system, particularly in the areas of Maternal and Child Health, and Health Governance.

7. The Articles of Association of the Kenya Hospital Association also provide for the election of the Board of Directors, with President Ruto accepted in 2022, following his nomination by the Association.

8. It is therefore in both its capacity as Patron of the Association and as President of the Republic of Kenya that President Ruto was briefed and apprised of the governance dislocations regarding the situation facing Nairobi Hospital.

9. Several institutional processes had already been initiated to address the governance challenges affecting the Kenya Hospital Association.

10. Over the past year, the Chief of Staff and Head of the Public Service Reform Commission, Mr. John Njoroge, led a team of experts and stakeholders, including members of the Board, doctors and other concerned stakeholders, to undertake a comprehensive review and resolution of the disputes affecting the institution. Initial, in total, fewer than fourteen meetings were held to resolve the issues.

11. These engagements resulted in the recommendation of the Board of Management through a process agreed upon by the concerned parties, with stakeholders providing feedback in order to accommodate the various interests represented within the Association.

12. In addition, a Five-Point Reform Agenda was agreed upon by the stakeholders to guide institutional reforms ahead of the Annual General Meeting scheduled for December 2023. The agenda included:

i) Verification and clearance of the KHA membership register ii) Review and strengthening of the KHA governance instruments iii) Review and strengthening of KHA governance instruments, including the establishment of effective internal dispute resolution mechanisms iv) Appointment of an Independent audit firm to conduct a forensic audit and submit a report to the Board of Management v) Preparation for a credible and transparent Annual General Meeting of the Kenya Hospital Association

13. Subsequently, and following petitions from concerned members of the Association, the Attorney General issued a directive under Section 900 of the Company Act, 2015, instructing the AG to investigate the affairs of the Kenya Hospital Association.

14. A multi-agency task force comprising representatives from the Business Registration Service, the Audit Recovery Agency, the Kenya Revenue Authority, the Kenya Medical Practitioners, Dentists and Pharmacists Council, the Kenya Medical Practitioners, Dentists and Pharmacists Intelligence Service, and the Financial Reporting Centre undertook the investigation. The report was submitted to the President on 28th March 2023, after which appropriate directives were issued to the relevant agencies for further action in conjunction with the AG.

15. Recently, President Ruto also granted a request for meetings with key officers of the Kenya Hospital Association, including those responsible for long-term care at the facility. During these engagements, the President was briefed on the current status of the institution and the urgent measures restoring stability to the institution.

16. The President noted the ongoing processes being undertaken by the management of the Kenya Hospital Association and indicated his support for the pending report, to safeguard the interests of patients, staff, medical professionals and employees and the long-term future of this hospital.

17. Nairobi Hospital remains a vital pillar of Kenya’s healthcare system and a respected center of medical excellence in East Africa. It is clear that in the national interest that the current governance, financial and operational challenges faced by the institution be addressed and resolved through lawful, transparent, and sustainable processes.

18. The Government will continue to support all necessary steps within the law to restore stability, strengthen governance, and ensure that Nairobi Hospital continues to provide high-quality healthcare services to Kenyans and patients from across the region.

Hussaini Mohamed, MHS State House Spokesperson March 16, 2023