Harmony Holdings Ltd petitions EFCC over mismanagement of Kwara Hotels by KHIMS - 9japarrot


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Wednesday 9 December 2020

Harmony Holdings Ltd petitions EFCC over mismanagement of Kwara Hotels by KHIMS

• How KHIMS engaged by Saraki in 2009 left liabilities running into N469m, went away unchallenged

• Turnaround imminent as competitive bidding process on by current mgt to appoint new investor

The new management of Harmony Holdings Limited (HHL) under Group Managing Director and Chief Executive Officer, Mallam Abdullahi Abdulmajeed has petitioned the Economic and Financial Crimes Commission (EFCC) over the mindless and unchallenged mismanagement of Kwara Hotels, one of its subsidiary companies by KH Integrated Management Services (KHMIS) and its alter ego — Dr Bolanle Austen-Peters.

KHIMS was engaged by the Kwara State Government in 2009 under the reign of Dr Bukola Saraki in a lease arrangement expected to last for 15 years with the agreement that it would turn Kwara Hotels to a four-star hotel of international repute.

In 2012 under the administration of Dr AbdulFatah Ahmed, Harmony Holdings took over the supervision of Kwara Hotels and a couple of other state-owned businesses.

When Harmony Holdings came on board at the time, it discovered a mindless mismanagement and maladministration of Kwara Hotels by KHMIS coupled with the violation of virtually all the items contained in the Lease Agreement.

For instance, KHMIS had contrary to its covenant to invest the sum of $2,271,300 of its own fund to upgrade Kwara Hotels, borrowed the sum of N350,000,000.00 from Guaranty Trust Bank (GTB) and used income generated from its management of Kwara Hotels to defray the loan.

It also failed to complete the renovation of the hotel within 10 months as contained in the Lease Agreement, while avoiding the payment of 4% net profit and 1% gross revenue to Kwara State Government as rent, among other mind-boggling infractions.

These breaches, general mismanagement, staff and customer dissatisfaction made Harmony Holdings Limited to terminate the Lease Agreement between Kwara State Government and KHMIS in October 2016, which at the time left huge liabilities, backlog of unpaid gratuities, pensions, PAYEE among other obligations to the tune of N468,772,861.00.

Nevertheless, KHMIS went away with these infractions and atrocities unchallenged by the previous administration, thereby leaving a huge deficit on the state treasury since some of these obligations, especially the ones that relate with the staff had to be met following public outcry.

The GMD/CEO expressed confidence in the EFCC, while appreciating the anti-corruption institution for its great job in facilitating the return of looted funds, assets belonging to Kwara State.

In another development, the current management of Harmony Holdings has announced that plans are underway to overhaul and redevelop Kwara Hotels into a standard state of the art four star hotel deserving of its status as one of Kwara State-owned iconic heritage.

In line with the mandate of His Excellency, Mallam AbdulRahman AbdulRazaq for the commencement of competitive process to source for a competent management company with the requisite capacity to upgrade the facility and manage it professionally, request for expression of interest had since been advertised on various media platforms, and submissions by interested investors are undergoing due diligence and critical scrutiny by professional transaction advisors so that the best hand could be recruited for the imperative turnaround management and upgrade process.

This current process is following the extant provisions of due process considerations as against the process that gifted the asset to KHMIS which was shrouded in secrecy and without any competitive bidding process.

The current managenent of Harmony Holdings therefore wishes to assure members of the public, particularly Kwarans that the process for the rejuvenation of Kwara Hotels is ongoing and they can be assured that our Kwara Hotel of pride would emerge from this process bigger, stronger and better, just as those responsible for its moribund status would account for it in no time.

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