Kwara shuts Harmony Holdings due to huge losses

Following its numerous financial crises, liabilities, and non-profitability since 2012, Kwara State Executive Council on Tuesday resolved to wind down its business concerns, Harmony Holdings.

The government, in a statement signed by the state Commissioner for Communications, Mrs Bolanle Olukoju, on Tuesday, reverted all public properties in Harmony Holdings and its wobbling subsidiaries to the Ministry of Finance Incorporated for better management and reduced liabilities.

A Government House statement said that “At a meeting in Ilorin presided over by Governor AbdulRahman AbdulRazaq, the council received briefings from the Commissioner for Finance, Dr. Hauwa Nuru, on the status of the companies and the best way to stop their continuous losses, despite several bailouts and loans that did not yield anything in the public interest.”

The commissioner said “huge public funds had been sunk into Harmony Holdings and its subsidiaries like Harmony Transport Services, Harmony Insurance Brokers, and Harmony Investment and Property Development Company, among others, with no penny as returns on investment to the state since 2012.”

Nuru said the only profitable one is the Harmony Securities Limited, while Harmony Transport, Harmony Insurance Brokers, Harmony Investment, and Property Development Company have remained unprofitable.

“The state government has come to the aid of some of these companies to stay afloat many times through bailouts, grants, and loans to meet their obligations. Despite all the financial assistance, they are still struggling to generate enough revenue to meet their obligations.

“The application of the quick ratio on these companies indicates a ratio below the industry ratio of 1:1 based on audited financial statements of 2022 and 2023, which suggests that the concerned companies are not in a strong financial position to meet their short-term obligations”, she explained.

Nuru requested the council to approve the dissolution of the firms and reversion of public properties in their care to the Ministry of Finance Incorporated as an investment vehicle to manage the government’s interests, estates, and rights in a sustainable way that follows due process.

“This option is desirable because of its cost effectiveness, elimination of growing liabilities.

“Council members approved the proposal, which will then be sent to the House of Assembly for consideration and ratification,” the commissioner said.

The council was also briefed about the outstanding obligations and liabilities of the firms as part of the due process for the reforms.