The CEO and board of directors at AAR Hospital are currently in the midst of a heated conflict, primarily revolving around expenditures related to the recently inaugurated AAR hospital on Kiambu Road, a facility that cost Sh3.5 billion to construct.
The state-of-the-art, 140-bed hospital commenced operations in 2021, with President William Ruto commissioning it in February 2023.
The project’s origins date back to 2015, and despite initial challenges that nearly derailed its progress, the facility was eventually completed.
CNYAKUNDI.COM, in 2022, exposed how the AAR facility was falling
Tensions escalate
However, tensions have now escalated, leading to discord between the board, the CEO, and both senior and junior staff.
Notably, four staff members, including CEO Steve Okeyo and the Chief Finance Officer, are facing potential termination, ostensibly framed as a ‘cost-cutting’ measure, although the affected parties suspect ulterior motives.
AAR Hospital is owned by Hospital Holdings Investment (HHI), overseeing the management of healthcare companies in Kenya and Uganda.
Notable investors, including the World Bank’s IFC and European sovereign funds, supported the project with approximately Sh4 billion in 2018.
Nevertheless, upon the hospital’s opening in 2021, concerns arose about the subpar quality of 30% of the medical equipment, sourced from a single supplier in India.
Prior to Mr. Okeyo’s arrival in June 2021, HHI had failed to meet investment targets, resulting in financial deficits.
Okeyo’s mandate was to open the new facility, stabilize the business, and position it for future growth. Despite internal conflicts, insiders report significant growth in the past two and a half years.
Fraud Revelations
Recent revelations include potential fraudulent activity depleting shareholder funds and irregularities in expense records, such as possible land cost inflation.
The board’s decision to make key functions redundant and close the management office company, citing poor performance and financial constraints, prompted legal action from Mr. Okeyo.
He perceives this move as retaliation for exposing the board’s alleged misconduct in tendering processes and the importation of substandard equipment.
The board’s notice of restructuring, dated November 10, 2023, is currently under scrutiny in court, with a decision expected by December 10, 2023.
