Laico Regency, a Nairobi hotel owned by Libya's state-linked investment company, has entered liquidation, terminating contracts with staff who had been on unpaid leave since March 6, 2020—just days after Kenya confirmed its first coronavirus case.
The hotel initially placed workers on 30-day unpaid leave, later extending the period until June 2020. By September 2020, caretaker manager Jamal Ahmed notified staff of indefinite closure, citing financial distress.
The property's troubled history dates to 2008, when Kenya's Finance Ministry—led by then-Deputy Minister Henry Kimunya—sold the former Grand Regency Hotel to Libya for Sh2.9 billion. The transaction followed the government's seizure of assets from Kamlesh Pattni, a businessman linked to the Goldenberg scandal, who later sued Kenya over alleged coercion in the deal.
UN sanctions imposed on Libya in 2011, triggered by its role in a civil war that resulted in civilian casualties, have severely restricted business operations. These sanctions, combined with pandemic-related losses, have left Laico Regency unable to sustain operations, according to court filings.
In April 2021, the Kenya Union of Domestic, Hotels, Education Institutions, Hospitals and Allied Workers (Kudheiha) negotiated a separation agreement with Laico Regency, offering employees exit packages based on tenure. However, 11 workers challenged the deal, arguing it failed to account for future salary increments and sought a Sh51 million court deposit to secure their claims.
Court records reveal Laico Regency's financial struggles predate the pandemic. In 2019, Kenyan authorities froze Sh200 million in the hotel's KCB Bank account, citing money laundering concerns. The funds, intended to cover salaries and debts, were part of a bailout plan after Libya sold its Kigali branch to Rwanda.
During litigation, Laico Regency's caretaker manager acknowledged the pandemic exacerbated existing financial challenges but denied plans to abandon Nairobi. The court rejected the workers' request for asset seizure, noting the hotel had engaged in good-faith negotiations with Kudheiha, the recognized workers' representative.
