This archive report was first published on 19 December 2019.
On December 19, 2019, the Kenya Red Cross Society took a bold step to revitalize its struggling hotel business by inviting administrators to run its hotels under the recently enacted Insolvency Act.
The move aims to protect the businesses from lenders in case of temporary financial distress, as the law shields companies from action by lenders in such situations. Two of the hotels, Boma Hotel and Boma Inn Nairobi, are located in Nairobi, while the third, Boma Inn Eldoret, is situated in Eldoret.
Administrator PVR Rao, appointed by the society, took over the management of the hotels last weekend and barred the current management from transacting any business without his express written consent.
Outgoing Secretary-General Abbas Gullet explained that the purpose of inviting the administrator was to turn around the struggling hotel business, emphasizing the importance of strict adherence to financial discipline in managing the businesses.
Dr. Gullet stated, 'As an organisation whose primary funding comes from donations both local and international, we take our fiducial responsibilities very seriously.'
The hotels are owned through Red Court Hotel Ltd, which owes at least one local bank.
