First, there was a call for an annual general meeting (AGM) for members of the Kenya Hospital Association (KHA), which manages Nairobi Hospital.
This AGM call is then followed by a court order and a request for an extraordinary general meeting (EGM). An AGM is an annual meeting held by a company to discuss financial performance, elect directors, and conduct other business as defined in the bylaws. An EGM, on the other hand, is a meeting held outside the company’s regular schedule to discuss and vote on certain issues that cannot wait until the next AGM.
While KHA members are still digesting this development, another legal challenge was filed in court to stop the EGM.
The AGM has been sued by KHA members, but the board has sought a court order to block it. KHA members then invited the RUPSLB.
On September 12, High Court Judge Peter Mulwa adjourned the EGM, scheduled for September 18, pending the hearing of the case filed by KHA challenging the first order.
The judge fixed the matter for mention on October 8, after directing senior counsel Ahmednasir Abdullahi, who filed the suit on behalf of 400 KHA members, to serve the council with court papers.
In the application, Mr. Abdullahi submitted that the board members, led by chairman Chris Bichage, called for a board meeting at a Nairobi hotel through a notice issued on September 3.
He said the court was never informed that the members called for the AGM scheduled for September 21.
According to Mr. Abdullahi, the court was invited to the middle of the boardroom battle because the members had issued a notice, paid for the board, and were ready to proceed with the AGM to remove the board.
The lawyer said the injunction obtained by the board was an attempt to undermine the constitutional right of members to recall non-performing boards as stated in the Companies Act and the company’s articles of association.
“To the extent that the subject lawsuit and the injunction are related to the verity in law of the requisition taken in accordance with the provisions of section 277 of the Companies Act and Article 18 of the Companies Act, and as a legal document used and applied by the company. to start the process of the external general meeting ordinarily, under the provisions of Section 3 of the Companies Act, this court has no jurisdiction to pass the impugned order and or deal with the suit,” the lawyer said.
Mr. Robert Shaw, a KHA member, said after the board failed to hold the AGM, he and 387 other members (who signed the lawsuit) made a requisition for the meeting to the board of directors as required by the KHA. Articles of Association and Company Law.
He said the decision by the board was a “desperate attempt” to use the court process as a shield against legal proceedings.
Mr Shaw said the doctors had issued a strike notice if the council failed to back down. “The purpose of the court order is to increase and complicate the existing situation and they should be dismissed and allow the meeting to continue as scheduled,” he said.
He added that the requisition for the AGM states the intention of the members to consider and approve or give a resolution to remove the director from office and also highlights the general reasons related to all board members and special reasons related to certain directors.
He said the board is in the process of committing the company and its assets to a Sh4.2 billion syndicated loan. “The company is currently struggling financially and certainly does not have the capacity to pay the loan installments of more than Sh4 billion. The actions of the company and the assets mentioned above will definitely result in the company going bankrupt,” he said.
Mr. Shaw added that the situation at Nairobi Hospital that requires the management board’s recall is a matter of life and death. “Lives have been lost and continue to be prejudiced, thus warranting urgent intervention, including by this honorable court,” he said.
KHA members accused Dr. Bichage and the vice-chairman, Philemon Mwaisaka, of failing in the leadership and management of the company, including chairing and presiding over board meetings that passed resolutions contrary to the articles of association, human resources and the company’s procurement manual.
In addition, the duo is accused of acting in a serious conflict of interest and violating the company’s articles of association by doing business with the hospital through a proxy company, and failing to properly lead and manage the company, causing a serious decline in the hospital’s performance, revenue, efficiency and brand reputation. .
As chairman of the board’s human resources committee, Barcley M. Onyambu allegedly presided over irregular employment of employees at the hospital based on tribalism, nepotism and cronyism, and violated the company’s human resources manual and board charter.
Other board members are Dr Magdalene Muthoka, Dr Fred Kambuni, Dr Mbira Gikonyo, retired judge Philip Waki, Prof Herman Manyora, Prof John Mwero, Geoffrey Ng’etich, Prof John Nyiro Mwero, Prof Jaldesa Guyo Waqo, Prof Peter Ndaguatha, Samson Mbuthia Kinyanjui and Valerie Gaya.
