Harmony Holdings Alleged Fraud Saga: Kwara Assembly opens can of worms


By Mumini AbdulKareem

Kwara House of Assembly on Tuesday ordered the immediate dissolution of the board and management of Harmony Holdings Limited (HHL) over alleged misappropriation of Kwara Government Assets in Abuja, Kwara, Lagos and Kaduna states.
The order was part of the resolutions of the House adopted after the report of its Ad-hoc Committee on Allegations of Misappropriation Relating to Government Assets under the care of HHL chaired by House Leader, Hon Hassan Oyeleke.
According to the House resolution, Harmony Holdings management were ordered to refund N51.4m while its Executive Director, one Mr Sanni Adebayo was requested to refund N20 million market value of a land he acquired at Catchment road, GRA in Ilorin.
Adebayo was further directed to pay another sum of N500,000 as rent due within 90 days.
Other resolutions of the committee included call for the appointment of a new board and management for the company.
It urged Governor AbdulFatah Ahmed to consider appointing highly experienced and business orientated personnel for the management of its board.
It further urged the Governor to immediately appoint an Administrator for the Holdings in line with provision of the Company and Allied Matters Act (CAMA) to take charge of properties and account of the firm.
The Speaker, Dr Ali Ahmad while reading the resolutions of the House directed the State Ministry of Justice to determine all monies paid into the personal account of Mr. Sanni Adebayo and which should be refunded to the State Government coffers within 90 days.
Ahmad further directed the current tenant of the Tourist Kitchen in Ilorin to vacate the property within 21 working days while the state Ministry of Justice should fine tune all legal technicalities and award the property to new client.
He charged the Committee to investigate ownership status of “Patigi Regatta Hotel, Stadium Shopping Complex and Gateway Plaza Abuja and report back in eight weeks time.
The Ad-Hoc committee was chaired by the House Leader, Hon Hassan Oyeleke with Hon Kamal Fagbemi, Hon AbdulRasheed Taiwo, Emmanuel Funsho Abodurin, AbdulKadir Segilola, Victoria Bunmi Afolayan and Hon Ahmed Ibn Muhammed, as members.
Many of those said to be involved in the alleged massive graft, according to the House report acquired choice properties and lands at high brow location in Lagos, Abuja, Kaduna and Ilorin.
The House said its six months findings showed that some of the property and lands were allegedly ridiculously undervalued and many others sold to self and cronies at outrageous prices.
However, this medium gathered last night that top government functionaries in the state influenced and benefited from the alleged under dealings perpetrated at HHL.
A top source told our reporter last night that the House report was “surprising,” adding that HHL had successfully managed government land and property under its purview and was only a victim of high wired politics.
The source noted that assets and liabilities like the Kwara Express were up to date in salary payment with robust plans to breathe life into some of the dwindling ones like Kwara Hotel, noting that bad publicity was its misfortune.
“Some of the companies to be investigated only exist on paper and not under the purview of HHL”, the source added.
But reactions have continued to trail the resolution of the Kwara State House of Assembly on the issue with calls by unions and individuals in the state for the alleged perpetrators to face justice and be brought to book.
In separate telephone chats with National Pilot last night, the Nigeria Bar Association (NBA), Nigeria Labour Congress (NLC) and other individuals warned that the issue must not be swept under the carpet.
But, the Cchairman of the board of HHL and the Emir of Ilesha Baruba, Professor Halidu Abubakar, said he could not speak against action of the state House of Assembly, adding that the lawmakers acted in their wisdom to arrive at the resolution and merely discharged their duty.
“I have nothing to say than to note that its (resolution) was in the wisdom of the state House of Assembly. It is part of their duty.
When asked if he concurred with the corruption allegation levelled against some management staff of the company, Prof. Abubakar said: “No, I am not admitting and like I earlier said, I have nothing to say about it. I can’t dispute what the Kwara Assembly has said. They acted in their own wisdom,” he submitted.
According to the chairman of the NBA, Barrister Issa Manzuma, the issue is unfortunate at this critical period of financial challenges for infrastructural development, adding that the plan was to seek for reliable corperate agencies that can assist in the revenue generation like the KWIRS.
“The KWIRS is doing well but unfortunately this is not the case with Harmony Holdings. We employ the government to ensure discipline in the system and anybody found wanting in this should not only be made to refund the money but be brought to book to serve as deterrent to others.
The state Chairman of the NLC, Comrade Yekeen Agunbiade told National Pilot that it is unfair for some group of people to sell the patrimony of the state.
“They should return whatever they have got to the state government. I cannot see reason why people should work for the state to acquire properties and some people will come and sell it. Embargo should be placed on the property as far as the money didn’t enter the government account. We don’t want any blanket cover-up but we must be made to know what is end result of this matter”, he added.
On his part, a retired Civil Servant and Human Resource management, Alhaji Ibrahim Abdullahi said the fault is not on the part of those who have been put in positions but those that appointed them.
He queried how “you would put over 20 companies of a state government together under s board of director of few persons, Each of the board has edit that set them up and were supposed to operate independently. This is where government made the mistake.
“This is the decision of the legislature, what do we think the state government would do because if the executive fail to ratify the decision of the House, the whole thing would come to nought. The government should ensure that those who committed fraud should pay for it”, he added.
Reacting, a Non Governmental Organisation, the Kwara Rebirth Ambassadors, in a statement signed by the Coordinator, Amb. Abdulrasheed Akogun commended the lawmakers for exposing the rot in HHL.
The group however lamented that the investigation dragged for too long. The Kwara Rebirth Ambassadors however demanded the constitution of an independent team of crack investigators to conduct a forensic audit of the company from inception till date.
The group also demanded that the House of Assembly should publish the full report of its investigative committee even as it called for complete profiling of all lands and property sold and cessation of sales of government-owned lands and property until full investigation is concluded.
However, when contacted, the Kwara State Governor, Alhaji Abdulfatah Ahmed said he was yet to be officially notified, adding that the House report would be studied before any pronouncement.
In a text message forwarded to this medium, the Senior Special Assistant on Media and Communications to the Governor, Dr Muideen Akorede said “We’re aware that a committee of the Kwara State House of Assembly exercised its oversight function on Harmony Holdings Limited. However Governor Abdulfatah Ahmed is yet to receive official notification of the outcome. Once the executive received the communication from the House of Assembly, it will be studied and responded to”, he added.

House Findings/Observations:

After an exhaustive and protracted interaction with the management of Harmony Holdings Limited via their document and on-the-spot visit to state-owned properties under their purview, the following are the findings/observations made:

I. The ownership of the company is not in contention.
ii. Harmony Holdings was created to boost the productivity of the existing subsidiaries as a means of diversifying the state’s economy which was necessitated by the dwindling federal allocation.
iii. The Company made a return of N1.262 billion between 2013 and 2015 and subsequently made a return of N289 million in 2016.
iv. Harmony Holdings which is a commercial entity is being run like a government parastatal. Often properties that were supposed to be sold at commercial rate were ridiculously released to staff and their cronies while the State bleeds under a stressed economy to survive.
v. The organogram is an arrangement of a bloated entity with huge financial burden run by a few decision makers. The subsidiaries are without any power to take decisions on their own.
vi. The structure of Harmony Holdings is deficient because of the multiplicity of subsidiaries most of which are comatose.
vii. Disharmony among top managers: there is no love lost between the Management Staff of the Holding Company and its subsidiaries. This disharmony has led to a police case which has ridiculed the integrity of the Company.
viii. Pending Judicial cases: The judicial cases between developers, in some cases, sitting tenants and Harmony Holdings have distracted the attention of the management from pursuing its cardinal objectives that would have been more beneficial to all and sundry.
ix.    Galadimawa, Abuja: Galadimawa Estate, Abuja, is a legacy project with a large span of land covering about 16 hectares amounting to 144 plots of land. The intention of State Government on the Estate was to embark on mass housing scheme that would be commercially oriented.
However, the estate has been seriously abused through the arbitrariness of the developers (GSAM Limited (Mrs. Banke Adejoke Olubanwo) and Wortheplus Limited (Mr. Tosin Bolaji) who disposed lands at will and remit the proceeds into their personal accounts. But even after the eventual takeover of the property from the developers, HHL did not justify its essence. Rather, similar profligacy and flagrant abuse continued unabated.
In a nutshell, the property was recklessly mismanaged by both the developers and the Harmony Holdings as it was difficult to accept the fact that the estate was developed without recourse to the master plan.
x.    Wuye Commercial, Abuja: It is a strategic area suitable for commercial activities. The construction of a commercial hub by the State Government was a good idea. However, the developer that was engaged by HIPDC (Mr. Razaq) is now dead. Meanwhile, Harmony Holdings is presently negotiating with Off-takers in order to see to the completion of the project.
xi.    Wuye residential: It is a legacy project. It was sold to Messrs Zillenium at N550 Million in the year 2014 but paid only 10% which is N55 million and nothing more since then. The contract was however considered dead and the status of the property  comatose.
xii.    JAMAA School, Kaduna: This is one of the four (4) properties in Kaduna Township that had been handed over to harmony Holdings for proper management and maximum productivity. Harmony  Holdings had been operating through third party agent in the affairs iof the property on a 5% commission basis.
Before the takeover, the rent was N500,000 but upon HHL coming on board, it was reviewed to N3.5million and subsequently, N5million was paid only once.
xiii.    Lamina House, Kaduna
The property was sold in the year 2015 for N100million as against its original valuation of N120million.
All the factors adduced to have been responsible for the undervalue sale of the property were not tenable.
xiv    PARIAL ROAD, KADUNA: This property was sold at the rate of N50 million in 2015 but only N47.5million was paid.  The balance of N2.5million was to be paid on the procurement f documents (C of O) of the property. The management of HHL promised to provide the document within 2 weeks after the committee’s inspection of the property.
xiv.    No. 24, KANTA ROAD, KADUNA: This property was under harmony Holdings but it is now under the office of Secretary to the State Government which has been converted to serve as an annex of the Kwara State Liaison Office.
xv.    Lagos Liaison Office:: The Kwara State Liaison Office in Lagos is a shadow of itself. The one time bubbling guest house has now been reduced to an undesirable property due to poor maintenance and under-utilsation.
Harmony Holdings took over the property in July, 2014 with the core mandate to revive the ailing facility for optimum productivity, hoping that, the revenue generating company would take advantage of the cosmopolitan nature of the environment where the property is located –Victoria island.
The liaison office has 14 rooms and two (burnt) ensuite at the top floor for accommodation. The restaurant within the vicinity has been leased out at the rate of N1.2million annually. From records, the guest house realises about N6million annually from accommodation. Each occupant pays a minimum of N6,000 per night. The patronage is low because of the poor state of the facility.
xvi.    Ahmadu Bello way Property, Lagos: This property was under Harmony Holdings but now ceded to KP3. It is a giant structure of great economic value going by its location.
No II, Catchment Road, GRA, Ilorin:  Mr. Adebayo Sanni who is a Director in HHL was a sitting tenant but before the sale of the property to him, he owed rent of two years. The sale of the property to Mr. Adebayo Sanni had no formal HIPDC Board approval but investigation revealed that the approval he got was hurriedly done through circulation and sign-off memo; neither the Exco nor Board of HHL sat to approve the sale of the property to him. HHL Board was completely kept out of the transaction. However, even-though a blur approval was given, Mr. Sanni Adebayo failed to pay the 10% acceptance fee until August, 2017 when this Committee had started its investigation. Furthermore, despite not making any down payment, not even the rent past due, he went ahead with the development of the property. In a nutshell, there was neither acceptance of offer given nor any sale agreement. On the Committee’s visit to the property, its development was almost 80% and perhaps, ready to be occupied now in spite of the fact that necessary payments, including the rent fee have not been made.

The pattern of the transaction clearly shows an overbearing influence of Mr. Sanni Adebayo on the company.
xviii.  NYSC Quarters, GRA Ilorin: This property has been under lock and key since 2015 due to lack of funds to renovate it.
xix. Oko Close, GRA, Ilorin: It is a State property under Harmony Holdings that has been leased out. The tenant is default of rent.
xx. Kulende: Ten number of 2 bedroom flats were sold in 2015 at N2.2million each and since then, only 3 flats fully paid their money. The remaining flats are yet to make any payment.
xxi. Kulende Shopping Complex: The property was not part of the assset that was bequeathed to Harmony Holdings.
xxii. Adewole Estate: There are four (4) bedroom flats. Three of the flats have been sold for N8.3million, N9million and N9.5million respectively. While the rest have fully paid, the 3rd flat which was sold for N9.5million has only paid N2million with an outstanding balance of N7million to pay since 2015.
xxiii. Stadium Complex and Bolyman Petrol Station were excluded in the documents submitted to the Committee.
xxiv. Bacita and Jebba: There are about 68 structural properties in both Bacita and Jebba under Harmony Holdings. However, these properties are old and dilapidated. Negotiations with Dangote Group for possible takeover of the property in on-going.
xxv. All State owned properties under Harmony Holdings have been seriously abused as a result of bad investment strategies. This is responsible for the poor operation of valuable business assets like; Kwara Hotels, Central Business Centre, Abuja, Kwara State Liaison Office Guest House, Lagos etc.
xxvi. The Group GMD and the Board of HHL looked the other way while atrocities such as the allocation of land in Galadimawa Estate, sale of Wuye Residential and Wuye Commercial, the opaque lease of Tourist Kitchen, the unpaid rent and sale of the property at Catchment Road, the infighting that resulted to Police involvement in the affairs of the holding company, countless litigation between contractors, tenants and the company occurred.
xxvii. Management Staff and Directors are involved in businesses with the Holding Company and get juicy negotiations in favour of their interests.
xxxviii. The Internal control system at Harmony Holdings and its strategic Business Units (SBUs) is very weak. The external audit in the SUBs is narrow in scope and depth which permitted perpetration of fraudulent tendencies. Failure of corporate governance may be exemplified by cheques and cash paid into personal accounts, under the guise of making money from the company. There was evidence of repeated sale of government property with payments made into personal account of Mr. Bayo Sanni.
xxix.     Tourist Kitchen: The facility was transferred to Harmony Holdings Limited for effective and efficient management. Harmony Holdings has however leased out the property to Messrs Island Trading Ltd for a period of 25 years with effect from 27th February, 2015. Meanwhile, the lease agreement of the property to Island Trading Ltd. was non-transparent due to the fact that the company did not participate in the bidding process. Zest Management Services Ltd which bided and paid N1.2m to HIPDC was replaced through proxy by Island Trading Limited. It may however be worthy to note that both companies were represented in the course of the transaction by a Director in HHL, Mr. Sanni Adebayo and his brother, Abiola Sani, Mr. Sanni Adebayo actually introduced the two companies and it may therefore be right to conclude that he is the owner of the two companies and that he used his position to influence the transaction at the detriment of the state. Unfortunately, upon enquiries and considering the opaque nature of the transaction, the file that contains all the necessary information of Tourist Kitchen was declared missing.
Furthermore, since there was no any board meeting that ratified the lease agreement, the valuation figure of Tourist Kitchen was smuggled into the agreement by Mr. Funsho Mustapha who was influenced by Adebayo Sanni to insert the figure in order to enable him perfects his plan to acquire the property at a give-away price. He equally changed the 5-year review of 15 years tenancy in the agreement to 25 years period.
Island Trading Ltd which in unclear circumstances replaced Zest Management has not paid any rent since 2015 when it took possession of the facility thereby rendering the Conglomerate to run at a lose which is against the philosophy of a Limited Liability Company. Conclusively, Tourist Kitchen is privately owned and run as a business outfit by Mr. Sanni Adebayo. It is therefore evident that he has an overbearing influence on the management and operation of HIPDC. His acceptance to the fact that both Zest and Island Companies were sponsored by him speaks volume.
xxx.    Curiously, there is a commercial building that is not under management of the Holding Company and that the gateway Plaza, Abuja. This is a four-storey commercial building in the  heart of Abuja’s central Business District at Plot 208, Zakari Maimalari Street. The Ad-Hoc Committee should be given more time to further investigate this anomaly i.e. the status of the property, who collects rental payment of the property and how much.
xxxi.    The operation and activities of harmony Holdings is not in tandem with its Memorandum and Article of Association.
xxxii.    despite the fact that House of Assembly are still conducting investigation into harmony Holdings and its subsidiaries, the Company went ahead to flout a finance house which is operated at the top floor of Martrite Super market, Ahmadu Bello Way, Ilorin.
xxxiii.    With the abysmal economic progress and poor revenue generation, Harmony Holdings Company has not justified the economic reason for which it was conceived and created.
House Recommendations:
Other resolutions of the House reads:
i.    Urged government to stop further sale or allocation of land at Galadimawa and Wuye forthwith and should place a sign post by the entrance of the estate to that effect.
ii.    The Ad-hoc Committee should further investigate the status of Gateway Plaza at Abuja, 8 weeks suspension.
iii.    The Management of harmony Holdings Limited should refund the sum of & N20 million as balance from the undervalue sale of Shehu Laminu House at Kaduna within 90days.
iv.    The Guest House at the Lagos Liaison Office should be immediately rehabilitated and put to commercial use.
v.    The Management of Harmony Holdings Limited should refund the balance of N7 million from the sale of Adewole Properties and N44.4m from the sale of Kulende Properties respectively.
vi.    Catchments Road at GRA Ilorin still belongs to State Government and any construction on it should be removed.
vii.    The current tenant of Tourist Kitchen (Island Trading Company) should vacate the property within 21 working days while, the Ministry of Justice sanitise the legal logjam and award the tenancy to a new credible tenant which should be done in a transparent manner within 21 days.
viii.    Further direct the Ad-hoc Committee to conduct investigation into the status of Stadium Complex Building, Patigi Regata Hotel and Bolyman Petrol Station to ascertain the general status.
ix.    All further action in respect of Stadium Complex and Bolyman Petrol Station be stayed.
x.    The incorporation documents of Harmony Holdings Limited should be revalidated.
xi.    The board and management of harmony Holdings should be dissolved. New managers should be appointed to take stock of the properties, accounts and interests of the Company.
xii.    Urged the Governor to consider appointing of highly experienced and business oriented personnel to new board and Management of harmony Holdings Limited.
xiii.    All monies paid into the personal account of one Mr. Sanni Adebayo, an Executive Director of Harmony Holdings should be determined by the Ministry of Justice and refunded within 3 months and that the Ministry should consider taking further legal action as appropriate.
xiv.    Mr. Sanni Adebayo is hereby directed to pay market value of 500,000 2 years to the amount the Catchments Road property.
xv.    Mr. Sanni Adebayo should pay for Island Trading rent of Tourist Kitchen from 2015 to day within 3 months.

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