Kenya Red Cross Society has invited administrators to run its hotels in a self-initiated plan under the recently enacted Insolvency Act.
Two of the hotels are in Nairobi while a third is in Eldoret.
Under the law, businesses are shielded from action by lenders in case of temporary financial distress as could be the case with the hotels.
PVR Rao, an administrator appointed by the society, also barred the current management from the business after taking over last weekend.
“None of the directors, shareholders, employees and other person is authorised to transact any business on behalf of the Company without express written consent from the administrator,” he wrote in a notice.
Outgoing Secretary-General Abbas Gullet said in an email to The Standard that the purpose of inviting the administrator was to turn around the struggling hotel business.
He added that there was strict adherence to financial discipline in managing the businesses that have now been protected from lenders.
“As an organisation whose primary funding comes from donations both local and international, we take our fiducial responsibilities very seriously,” Dr Gullet said.
Boma Hotel, Boma Inn Nairobi and Boma Inn Eldoret are owned through Red Court Hotel Ltd, which owes at least one local bank.
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