- Says contract violates MoU agreement
- No value for money as sensitive documents missing in transaction file
Group Managing Director and Chief Executive Officer of Harmony Holdings Limited, Mallam Abdullahi Abdulmajeed has Monday, December 21 formally received the report of the Investigative Committee on BOTAD.
The 10-person committee was set up November 25 to investigate circumstances surrounding the award of a controversial contract to BOTAD General Limited for the supply of medical equipment to Harmony Advanced Diagnostic Center (HADC) in 2010.
After two weeks of fact finding and document review, the committee which was chaired by Mr Abdulraheem Yusuf, a financial expert with years of experience in the banking sector, found out that the contract violated important items in the Memorandum of Understanding (MoU).
According to the committee, the MoU says the contract was not subject to any monetary variation outside the contract lump sum figure but revelations emerged that the contract was varied thrice to the tune of N342 million on no justifiable account.
“The Committee did not sight any record to show that BOTAD complied with the terms of the letter of award by providing the following: Tax clearance and VAT certificate, Advanced Payment Guarantee and Performance bond. There is no evidence that BOTAD General Ltd paid the required vetting fee to the Kwara State Ministry of Justice as required under the Tender Policy of the Kwara State Government via Tender Policy Circular No. HS/S/F/33/54 of 5th February 2004,” the report read in part.
The investigative committee also established a case of tax evasion in the sum of N84,202,626.75 on the part of BOTAD unwittingly facilitated by former Governor AbdulFatah Ahmed.
“BOTAD General Ltd claimed refund of the sum of N84,202,626.75 on Withholding Tax and Development Levy claiming that the contract was net of Withholding Tax and Development Levy. Surprisingly, the Executive Governor of Kwara State (AbdulFatah Ahmed) by approval dated 19th March 2013 approved the refund of the sum of N84,202,626.75 thus allowing BOTAD to evade tax.”
The committee also lamented that despite the humongous amount sunk into the contract to the tune of $7.4 million (N1.1 billion), value for money was not achieved as the medical facility did not for a day remit a single kobo to the state government as returns on investment in the entire period of operations under the last management of the center and state government respectively.
The committee welcomed the impact already being recorded with the ongoing turnaround management under the current management that is presently generating modest profit as the center is poised to start remitting returns on investment to the Kwara State Government starting from the end of its 2020 financial year.
The report also observed that a number of sensitive documents were missing and had been mischievously removed from the transaction file kept in the custody of the Ministry of Health.
“It was discovered that many important documents were missing from the transaction file brought by the Ministry of Health. For example, some of the attachments to the letter of award were missing, the contract agreement was missing, including evidence of the sum paid to the contractor, Advanced Payment Guarantee (APG)/Performance bond.”
Meanwhile, the committee posited that the Harmony Advanced Diagnostic Center was a brilliant innovation that was only unfortunate to have lacked a sincere leadership from inception, appealing to the state government to support the ongoing turnaround management efforts of the current leadership of Harmony Holdings Limited as the facility has potentials of servicing the whole of West Africa.
“Harmony Advanced Diagnostic Center is one of the rare medical facilities in the whole of Africa that combines both laboratory and radiological services. Most diagnostic centers only focus on one of the two branches.”
It is instructive to note that the committee interacted with some personalities who were associated with the contract and others who were actively involved in the management of HADC in the previous administration.
The testimonies of some individuals on the board of HADC pointed out that the contract awarded to BOTAD was never brought to the knowledge of the board for possible ratification, suggesting an evidence of foul play and mischief.
For his part, the GMD/CEO of Harmony Holdings, Abdulmajeed saluted the efforts and strength put into the all-important state assignment by the committee members, saying the step is bold, audacious and courageous.
He noted that the names of the committee members will be written in gold and would forever be registered in the book of history as part of those who contributed selflessly to the herculean task of cleaning the system with their painstaking and timely intervention.
The Harmony Holdings boss promised that their efforts will not go in vain as the report would be reviewed and justice would be done to its content and appropriate recommendations will be made to the Kwara State government (the business owner) for neccessary restitution.
