Swarup Mishra’s woes deepen with planned auction of prime Mediheal properties
What you need to know:
- Last year, the High Court issued an injunction restraining the sale of the politician's prime properties.
- The properties have been put up for sale due to multi-million loan arrears owed to banks by the businessman-turned-politician.
Several of Swarup Mishra's prime properties in Eldoret are to be sold at an auction scheduled for July, auctioneers have confirmed.
An auction slated for July 2, 2024 by Eldoret-based Jomuki Auctioneers lists four prime properties owned by Dr Mishra and his wife under Mediheal Group Limited, including 50 acres of land in Ngeria, Uasin Gishu county, and two acres in Elgon View Estate, as well as the land that housed his former Constituency Development Fund (CDF) offices while he served as Kesses MP.
The Nation has established that the properties have been put up for sale due to multi-million loan arrears owed to banks by the businessman-turned-politician who runs the once vibrant Mediheal Group of hospitals with branches in parts of the country, including the Mediheal Eldoret Fertility Centre.
Four properties confirmed to be up for sale by Jomuki Auctioneers in Eldoret are:
1. L.R. No. Pioneer/Ngeria Block 1 (EATEC)/11002 (0.09Ha i.e. 0.2223 acres) in Blosson area - Kiambaa, Kesses sub-county.
2. L.R. No. Cheptiret/Cheplaskei Block 2 (Chepkigen) 194, 196 and 197 measuring 4.05, 12.14 and 4.05Ha i.e. 10.0, 30.6 and 10.0 acres at Ngeria Centre.
3. L.r No. Eldoret Municipality/Block 14/474/ measuring 0.4360Ha i.e. 0.76 acres in Elgon View- Greenvale area.
4. L.R. No. Eldoret Municipality/Block 14/475/ measuring 0.440Ha i.e. 1.086 acres in Elgon View, Greenvale area.
Last year, the High Court issued an injunction restraining the sale of the politician's prime properties in Eldoret town over a Sh61 million loan arrears. This came after the former MP, his wife Pallavi Rajthan and their hospital, Mediheal Diagnostics and Fertility Centre, sued Legacy Auctioneer Services and Commercial International Bank (CIB) Kenya Limited.
The matter was heard by High Court Judge Reuben Nyakundi, who said the bank had failed to provide sufficient evidence to prove that the former legislator had secured a loan against the property in question.
The financial troubles of the owner of the once vibrant Mediheal Group of Hospitals began two years ago when insurance funds were stopped from being transferred to the hospital.
Earlier this year, during a visit to Mediheal's Eldoret branch, the National Assembly Committee on Health learned that the National Health Insurance Fund (NHIF) owed the facility about Sh51 million, with the hospital requesting that the funds be released to support its operations.
It emerged that since 2021, the facility had received about Sh1.7 billion from NHIF in the form of claims.
"We have checked the hospital's records and we have not found any discrepancies. We feel sorry for this hospital and we will write our report and table it in Parliament," said the chairperson of the parliamentary committee, Dr Robert Pukose, during the visit.
The team was touring selected health facilities to assess whether some were being paid fraudulently by NHIF, following a Nation exposé that showed some were colluding with the health insurer to make fraudulent claims.
During the visit, Dr Pallavi Mishra, the director of the group's hospitals, revealed that the Eldoret branch had seen a drastic reduction in its client base.
"We used to see up to 500 outpatients in a single day, but now we see between 50 and 60. We have not been able to service our huge bank loans and other obligations," she explained.
A visit to the facility by the Nation team earlier this year found wards and the emergency wing closed, with one of the main buildings completely shut down.
The Mediheal Group of Hospitals has five state-of-the-art facilities in Eldoret, Nakuru and Nairobi, and outreach centres in Kisumu and Kakamega. There were plans to open more facilities in other towns such as Naivasha as part of an expansion strategy.
Mishras' Eldoret facility was the first to open under the Mediheal group of hospitals, becoming operational in December 2004, and had been expanding slowly until the recent financial difficulties.
By 2015, the owners had established more than three facilities offering general medicine and other specialities, including IVF and kidney transplants. By then, the facility had performed more than 300 kidney transplants.
"The growth was gradual. It was not a one-time thing," Dr Pallavi Mishra, a gynaecologist by training, told the parliamentary committee when members visited in February this year.
"We took huge bank loans, bought state-of-the-art equipment and slowly added more staff. The nurse-patient ratio was 1:1, which led to patient satisfaction," she explained.
Mediheal's financial problems began two years ago when some insurance companies stopped covering teachers, police officers and other civil servants who sought medical treatment at its facilities, without informing them of the reasons.
"We took huge bank loans to expand and provide quality healthcare to patients across the country and beyond. But when these insurance companies stopped remittances, the number of patients dropped by 60 per cent in three months," Dr Pallavi Mishra told the MPs.
When the committee visited the Eldoret branch, the owners said they had been forced to ask most of their staff to stay at home.
"As we were not able to maintain the supply of drugs and other services, this led to a decline in customer satisfaction, resulting in a decline in numbers," Dr Pallavi Mishra said.
In December last year, the facility closed its residential services, which led to a slowdown in operations.
"We decided to keep the staff without dismissing them, but we could not pay their salaries. Some of them went to court and the courts ordered NHIF to stop payments and other insurance companies also slowly withdrew," said Dr Pallavi Mishra.
According to Dr Mathawale Vaijanath, Eldoret's medical director, the non-payment of salaries for a year ran into millions of dollars, prompting lawsuits from some of his staff.
"We still have patients who come here for services, but unfortunately we are forced to turn them away and go to other health facilities. We used to serve patients from Kenya and over 15 countries on the continent and the closure has had a ripple effect on the health system," he lamented.
The management told the Parliamentary Committee on Health that the former lawmaker, who is also the chairman of Mediheal Group Limited, was seeking more funding from local and international partners to revive its financial position and bring it back to life.
Some observers have suggested that Dr Mishra's political dalliance with the Azimio coalition ahead of the 2022 general elections may have cost him his business empire, although he has since crossed over to Kenya Kwanza and declared his support for President William Ruto, the United Democratic Alliance party leader.
Asked whether his political leanings in the last general election had caused financial problems for the hospital group, Dr Pallavi was cautious, saying: "Let me not comment on that for now."
In May 2023, Dr Mishra defected to the ruling UDA party and was received by the party's secretary general Cleophas Malala at the party's headquarters in Nairobi.
“Please forgive me for the mistake I made. I will remain a loyal member and I thank God I am now back home and I got my family back home,” the former one-term lawmaker had stated.
“I confess the mistake and plunder I made. I chose the wrong party and direction but from today God sent me where I belong. We will now work together to strengthen the party,” he had stated.
