MONROVIA – Robert Gumede, CEO of Guma Group and a key partner in HPX, is currently under investigation for his alleged involvement in a major corruption investigation in South Africa. Gumede, who has been linked to a controversial deal involving 285 units of earth-deal with the Liberia government, is also facing allegations of securing dubious contracts in South Africa during the COVID-19 pandemic.
The PPE Scandal in South Africa
Gumede, a prominent South African businessman, is at the center of a scandal involving a personal protective equipment (PPE) contract awarded during the pandemic. The contract, worth nearly R600 million (approximately US$33.6 million), was awarded to Red Roses Africa, a company closely associated with Gumede. According to a report by the Daily Maverick, a well-respected investigative weekly in South Africa, the Special Investigating Unit (SIU) in South Africa accused Gumede of playing a central role in orchestrating this deal, which involved significant overcharging and violations of public procurement laws.
The SIU’s investigation revealed that Gumede allegedly wrote to a senior official in the National Treasury, urging the government to procure PPE from Red Roses Africa, where he serves as board chair, and his nephew, Blessing Qwabe, is the director. Gumede reportedly claimed that Red Roses Africa, through its global partnerships, could provide certified protective gear and testing products urgently needed to combat the pandemic.
However, the SIU discovered that Gumede misled the South African Police Service about the sourcing and delivery of the PPE. He falsely asserted that the products could be imported from China on a specially chartered Airbus. In reality, no such aircraft was available, the investigation found, and the PPE was sourced locally from other companies. The investigation also found that some of the sanitizers supplied were substandard. The SIU alleges that Red Roses Africa drastically inflated prices, purchasing a 25-liter vat of hand sanitizer for R1,150 (about US$64.42) and selling it to the police for R5,405 (around US$302.76), resulting in a 370% gross profit—an “unlawful overcharge” that led to nearly R400 million (approximately US$22.4 million) in excessive profits.
Financial Mismanagement and Contract Breaches
Moreover, the SIU found that Red Roses Africa failed to fulfill its contractual obligations, delivering only a fraction of the agreed-upon 90,000 25-liter containers of sanitizer and 12 million masks. After receiving R514.7 million (US$28.8 million) from the South African Police, the funds were swiftly transferred through Gumede’s network of companies and associates, many of whom had no prior involvement in supplying PPE. Gumede personally received R4.2 million (approximately US$2.35 million), while his nephew received R250,987 (around US$14,059).
In response to these serious allegations, the SIU has petitioned the Special Tribunal in South Africa to annul the contract and has demanded that Gumede, Qwabe, and Red Roses Africa repay nearly R391 million (about US$21.9 million) plus interest to the South African Police. Despite the gravity of these accusations, Gumede has steadfastly denied any wrongdoing. He maintains that the contract was lawful and that the profits were legitimate. Gumede has also accused the SIU’s chief investigator of fabricating evidence against him.
The Earth-Moving Equipment Controversy in Liberia
In Liberia, Robert Gumede was relatively unknown until Joseph Boakai’s bid for the presidency came to fruition. His name became more familiar after Boakai’s Minister of State without Portfolio, Mamaka Bility, announced the expected arrival of 285 units of earth-moving equipment, intended for distribution across Liberia’s 15 counties for road maintenance.
The arrival of this equipment, while welcomed by many Liberians eager for road infrastructure development, has also sparked controversy. Members of the Legislature and civil society organizations have raised concerns about the manner in which the 24 units of equipment were brought into the country, citing a blatant disregard for procurement laws.
President Boakai’s Defense and Legislative Scrutiny
In an effort to clarify the situation, President Boakai wrote to the Legislature, explaining that the importation of the equipment was based on a “gentleman’s agreement” with a “long-time friend” who facilitated the importation in support of his government’s ARREST Agenda. President Boakai did not name this friend, but it is widely believed in Liberia that this individual is Robert Gumede. The President stated, “This friend offered to provide the equipment in good faith and on a gentleman’s agreement, moved by solidarity and a desire to expedite the development agenda.” He further clarified that the government is still in the negotiation stage and that no formal contract or financial commitment has been made. “The discussions are ongoing, and no financial commitment has been made by the Government of Liberia and not a dime paid,” President Boakai stated.
The President also mentioned that the first batch of 24 units, which were removed from the Freeport of Monrovia on July 6, arrived at no cost to the government. He stated, “The first batch of equipment that arrived in the country was shipped at the supplier’s expense. The GOL [Government of Liberia] has not incurred any costs related to the transportation or acquisition of these machines.” The communication also noted that if the government fails to reach a mutually beneficial agreement, the supplier could either return the equipment or sell them in Liberia. President Boakai implied that the Legislature has not been involved because no formal contract requiring legislative ratification has been reached. He assured, “Once the negotiations are concluded and a formal agreement is reached, we will promptly submit the necessary documents to the Legislature for consideration/ratification. At that point, we welcome any requests for clarifications or discussions to ensure the process remains transparent and accountable.”
The President’s communication was, however, greeted with mixed reactions from members of the Legislature. The Senate’s Chair on Public Accounts and Audit, Senator Amara Konneh of Gbarpolu County, called for careful scrutiny of the President’s communication. In a Facebook post, Sen. Konneh urged his colleagues and private citizens to consider the reasoning behind the government’s possession of the equipment and their public display before taking them to the BTC Barracks, despite being privately owned. “It is crucial to address whether it is appropriate for the President to enter into informal agreements with a close associate on behalf of the nation. Who is the ‘friend,’ and what exactly is his relationship to the president? Understanding this is important for transparency, good governance, and the President’s anti-corruption agenda. Depending on how he handles the transactions, these yellow machines could define President Boakai’s legacy. His advisors don’t seem to be helping him,” Konneh stated.
Also critiquing the President was John Morlu, former Auditor General and a strategic member of President Boakai’s Rescue Mission, who called on the President to admit his errors. Morlu, who became vocal on President Boakai’s missteps after the election, argued, “Once you take custody, the risks and ownership have passed to you. Why can’t Uncle Joe simply say we made a mistake, apologize, and ask the Legislature to regularize the situation?” He added that regularizing such mistakes is common in a democracy, but the truth must first be established. “This is done in the USA through the Anti-Deficiency Act. Uncle Joe cannot believe the content of his letter is true and fair.” He asserted that government business cannot be conducted based on friendship and gentleman’s agreements. “A Liberian government official took ownership from the port, transported yellow machines from the NPA, and parked them in your garage (military barracks). Liberia is 100% on the hook for this transaction. This is simple Accounting 101 and Contracts with Customers 101,” Morlu stated in a social media post.
Gumede’s Expanding Influence and the Liberty Corridor Project
Beyond the earth-moving equipment, Gumede’s involvement in Liberia extends to a major infrastructure project known as the Liberty Corridor—a US$5 billion initiative that includes the construction of a heavy-duty railway connecting the north of Liberia (Nimba) to a new deep-water port in the southeast. This project, which was signed between the Liberian government, HPX, and Gumede’s Guma Group in February, also includes an extension of the hydropower network from Côte d’Ivoire into the Nimba districts of Liberia and Guinea, road network upgrades, and the installation of a fiber optic telecommunications cable.
HPX, led by Canadian billionaire Robert Friedland, has reportedly been lobbying against an amendment to a contract that would strengthen ArcelorMittal’s control over a railway critical for exporting ore from HPX’s mining concession near the Liberia-Guinea border. Since 2011, ArcelorMittal has been the primary user of this railway, transporting approximately 5 million metric tons of ore annually from its iron mine in northern Liberia to the port city of Buchanan.
His Excellency The President of Liberia His Excellency Joseph Nyuma Boakai Sr (centre) with the Founder, Chairman and CEO of I-Pulse Inc Mr Robert Friedland, Ms Bronwyn Barnes, President and CEO of HPX, Mr Robert Gumede Chairman and Founder Guma Africa Group, Amb.(ret) Peter Pham and Gerald Padmore of Cox Padmore Skolnik & Shakarchy.
Evasive bribery?
Despite the absence of a ratified agreement with the Liberian government, HPX, in a communication dated August 23, 2024, expressed strong commitment to providing substantial budgetary support to the Government of Liberia for the establishment and initial operations of a National Rail Authority. Bronwyn Barnes, President and CEO of HPX, stated, “We are prepared to provide budgetary support to the Government of Liberia for the formation and initial operations of the National Rail Authority. This demonstrates our commitment to ensuring that the rail management system operates under the highest international industry standards and with full transparency.”
This budgetary support proposal is structured under a payment arrangement and will be implemented upon the successful conclusion of their Access Agreement with the Liberian government. HPX acknowledged the challenges involved in transitioning to this new model of rail management, particularly given existing legal agreements, such as the one with ArcelorMittal. However, the company expressed optimism that, through cooperative efforts, this transition can be achieved promptly and efficiently.
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