The High Court has temporarily halted an investigation into Nairobi Hospital, in the latest legal development in the healthcare provider’s long running boardroom conflicts.
- •Justice John Chigiti suspended a search warrant that allowed the Directorate of Criminal Investigations (DCI) to access sensitive recordsand also blocked any attempts to freeze phone numbers or bank accounts associated with the hospital’s senior management.
- •The probe was initially authorized by Attorney General Dorcas Oduor, who had secured court orders permitting detectives to seize documents and electronic devices from the hospital and the Kenya Hospital Association (KHA).
- •On Monday, a separate court lifted a temporary freeze on capital expenditures by the hospital’s management, clearing the path for the healthcare institution to resume crucial infrastructure projects and financial restructuring.
In the petition on the ongoing probe, the KHA, represented by advocate Gitobu Imanyara, argued that the process was not a genuine effort to enforce the law but a tactic to intimidate senior managers amid internal disputes.
“There is an urgent need to safeguard patient information which is at risk of being divulged by the challenged investigations,” Imanyara said.
The association claimed the investigations threatened patient confidentiality and breached the Health Act of 2017, as well as the Data Protection Act. They also raised concerns that documents seized contained confidential advocate-client information, further compromising privacy. Imanyara urged the court to protect sensitive patient data, emphasizing that unauthorized disclosure could lead to significant harm.
On Monday, the High Court lifted a temporary freeze on capital expenditures by the hospital, in a ruling delivered by Justice Peter Mulwa. Justice Mulwa also declined to suspend the resolutions of the hospital’s December 2024 Annual General Meeting, stating that it would be an overreach that could destabilize the hospital’s operations.
“The court cannot grant permission for the continuation of a derivative suit if the cause of action has been ratified by the company or authorized before its occurrence,” Justice Mulwa ruled.
The lawsuit, filed by a member of KHA, sought to block the hospital’s board from engaging in capital expenditure, including equipment purchases, facility upgrades, and borrowing for ongoing projects. The plaintiff had alleged mismanagement, asset depletion, and a debt crisis amounting to over Ksh 3 billion as grounds for intervention, arguing that the board’s actions risked insolvency.
“This decision will safeguard the continuity of vital healthcare services, the implementation of long-term infrastructure plans, and the financial stability required to provide quality healthcare to our patients,” Board Chair Dr. Barcley Onyambu said.
The board’s decision to seek a KSh 4.2 billion offshore loan, intended for critical equipment upgrades—including cancer treatment devices and diagnostic imaging—had sparked concerns among members and stakeholders. However, the hospital’s management argues that halting capital expenditures would have worsened its financial woes and hindered essential services.
Meanwhile, the hospital’s CEO, Dr. Felix Osano, and 11 other senior managers were granted anticipatory bail of KSh 100,000 each by the Kibera High Court. The executives argued that the probe was a civil matter tied to disputes over board membership at KHA, and not a legitimate criminal investigation.
