Nairobi Hospital AGM Halted by High Court Over Alleged Mismanagement

The High Court has stopped Nairobi Hospital’s planned annual general meeting (AGM) after a petition raised questions about governance, leadership wrangles and alleged financial irregularities at the institution.

Justice Lawrence Mugambi issued a conservatory order restraining the Kenya Hospital Association (KHA), which owns and manages Nairobi Hospital, from convening or proceeding with its AGM that had been scheduled for February 6, 2026.

The order followed an urgent constitutional petition filed by Busia Senator Okiya Omtatah, alongside activists Bernard Muchiri Muchere and Naomi Nyakerario Misati.

In his ruling at the Milimani Law Courts, Justice Mugambi barred KHA, its officials, agents and proxies from “convening, holding, conducting, facilitating, or in any manner whatsoever proceeding with” the AGM or any adjourned meeting until further court directions.

He warned that disobedience of the order would attract penal consequences.

The court directed that the application and petition be served on the respondents within three days, with responses to be filed within seven days. The matter is scheduled for mention on February 23.

At the centre of the case are serious allegations of governance failures and financial mismanagement at the 70-year-old private healthcare institution, one of Kenya’s most prominent referral hospitals.

The petition claims that Nairobi Hospital is facing a deepening leadership crisis marked by boardroom infighting, disputed membership records and weakened oversight structures.

The petitioners allege that about Sh9.1 billion in accumulated depreciation funds meant for asset replacement cannot be fully accounted for, with court papers claiming that only Sh572 million is traceable in cash equivalents.

They further point to audited losses exceeding Sh3 billion, including a Sh2 billion deficit recorded in 2024, despite revenues of Sh12.86 billion in the same year.

According to the filings, supplier arrears have risen beyond Sh4 billion, threatening the hospital’s ability to maintain operations and deliver critical healthcare services.

The petition also flags a sharp increase in legal and professional expenses, which reportedly rose by Sh290 million to Sh680 million in one year.

Beyond finances, the case raises concerns about governance processes ahead of the AGM. The petitioners argue that the legitimacy of the membership register, which determines voting rights, is in dispute, alleging that 333 individuals were irregularly enrolled through a single bulk payment of Sh5 million.

They claim this was done to influence control of the association and compromise the integrity of the AGM.

The activists further argue that allowing the AGM to proceed would result in “irreversible governance actions,” including elections and ratifications, rendering the substantive petition meaningless.

Omtatah’s affidavit also describes Nairobi Hospital as a public trust institution, noting that it sits on 21.8 acres of public land granted in 1952 for healthcare purposes under strict conditions.

On that basis, the petition seeks heightened constitutional scrutiny, forensic audits covering the past decade, and orders freezing any sale or transfer of hospital land.

The case names 25 respondents, including KHA, its board members and senior managers, as well as state agencies such as the Directorate of Criminal Investigations, Ethics and Anti-Corruption Commission, Director of Public Prosecutions, Kenya Revenue Authority and National Land Commission, accused of failing to act on earlier complaints.

The court’s intervention freezes the hospital’s highest decision-making forum at a sensitive time for Kenya’s private healthcare sector, which is already grappling with regulatory pressure, delayed insurance reimbursements and uncertainty linked to ongoing health financing reforms.

Also read: Kenya Strengthens Specialised Healthcare Through Global Partnerships – Business News