This archive report was first published on 17 December 2019.
Kenya Red Cross hotels have been struggling financially for years, with the last positive capitalization recorded in 2011.
Despite this, the management attempted to manipulate the company's books to show that its fortunes were not dwindling.
However, the losses piled up, and the insolvency levels soared to Sh1.4 billion in just three years.
On December 16, 2019, the National Bank appointed PVR Rao as the administrator of the business, citing huge debts owed to the bank.
“None of the directors, shareholders, employees and no other person is authorized to transact any business on behalf of the company without express written consent from the administrator,” read a notice from PVR Rao.
The four hotels, Red Court, Boma Hotel Nairobi, Boma Inn Nairobi, and Boma Inn Eldoret, are all managed by the Kenya Red Cross, which was the biggest borrower from the National Bank.
The hotels' receivership comes after the National Bank was acquired by the Kenya Commercial Bank (KCB) Group, which has prioritized going after loan defaulters.
