Monrovia, Liberia – Without a doubt, every Liberian should welcome investment, particularly if it may result in new jobs and other economic advantages that could help the nation’s unemployment issue.
Additionally, Liberians were pleased with HPX’s arrival and its promised $5 billion investment plan, particularly in 2024 when a new government had just gained power.
However, there are significant concerns over the legitimacy of Liberia’s investment climate and the integrity of major infrastructure transactions in the nation given the relationship between Peter Pham, Robert Gumede, and Robert Friedland, the owner of HPX, in relation to the Liberty Corridor project.
An alleged fraudulent and exorbitant personal protective equipment (PPE) contract issued during the COVID-19 epidemic prompted the South African Special Investigating Unit (SIU) to bring a lawsuit at the Special Tribunal last year in an attempt to recover R390 million from millionaire businessman Robert Gumede.
Red Roses Africa (also known as Mainstreet 699), a Mpumalanga-registered corporation connected to Gumede through his nephew and business partner Blessing Qwabe, was awarded the contract, which was valued at about R600 million.
The SIU’s application, filed on 26 March, positions Gumede at the center of what investigators describe as an unlawful and unconstitutional procurement deal with the South African Police Service (SAPS). The SIU demands that Gumede, Qwabe, and Red Roses repay R390,754,000 plus interest within 30 days of a successful ruling by the tribunal, citing it as an “unlawful overcharge.”
It is alleged that Gumede and his accomplices postponed filing official replying affidavits even though they had four months to react. Rather, they put up a strong defense, calling the SIU’s evidence “baseless and unsubstantiated” and charging Jackey Mathabathe, the lead forensic investigator, with perjury.
The SIU’s probe expands on a 2021 Daily Maverick investigation that initially revealed the contentious PPE transaction. The SIU claims that Gumede wrote to Molefe Fani, a National Treasury officer, on March 25, 2020, five days after President Cyril Ramaphosa announced a national state of calamity, urging the purchase of personal protective equipment (PPE) from Red Roses Africa. Gumede asserted in his letter that his business was in a position to provide top-notch, globally approved PPE in an emergency situation.
However, SIU investigators allege that this representation was false. Among the key claims made in their affidavit:
False Promises of Direct Imports: Gumede allegedly told SAPS that the PPE would be imported via a “specially chartered Airbus” from China. The SIU says there was no such aircraft or available stock.
Local Resale at Exorbitant Prices: Instead of importing PPE, Red Roses allegedly sourced sanitizers and masks from local suppliers, including Dis-Chem, before reselling them to SAPS at inflated rates. A 25-liter vat of hand sanitizer, for example, was bought for R1,150 but sold to SAPS for R5,405, representing a 370% gross profit.
Failure to Deliver the Full Order: While Red Roses was contracted to supply 90,000 units of hand sanitizer and 12 million masks, the SIU claims that only two million masks were delivered.
Substandard Products: Random SAPS quality checks found that some sanitizers had alcohol content below the required 70% standard.
The SIU also tracks the post-payment distribution of cash, claiming that substantial quantities were transferred through a network of Gumede-affiliated businesses without providing SAPS with any concrete proof of worth. Gumede allegedly earned R4.2 million from the beneficiaries, while his nephew Qwabe received R250,987.
Apart from the accusations of corruption in South Africa, Gumede is also allegedly involved in the mining and infrastructure industries in Liberia, where he is establishing himself as a key figure in the projected investments in Guinea and Liberia by Peter Pham and Robert Friedland.
Gumede has been allegedly connected to the infrastructure finance talks for High Power Exploration (HPX), Friedland’s company that is leading the construction of the Liberty Corridor, a multibillion-dollar port and railway project that will allow Guinean iron ore to be exported through Buchanan, Liberia.
HPX estimates that the project will enable sustainable mineral development and downstream value addition to area economies, with an expected investment of $3 billion to $5 billion. The Government of Liberia would next negotiate with HPX and Guma Africa Group to agree on the framework giving them the sole right to build, finance, and operate the Liberty Corridor.
Gumede past involvement in controversial government contracts raises concerns over transparency and the legitimacy of business interests shaping this project. Pham and Friedland have both actively pushed HPX’s concept, highlighting how it may revolutionize the local economy. Gumede’s involvement in any part of the funding or implementation of the Liberty Corridor, however, would merit more investigation given his track record of procurement-related disputes.
As the owner of the Guma Group, which includes IT firm Gijima, Gumede wields considerable political influence in South Africa as an African National Congress (ANC) funder. The SIU alleges that intense lobbying efforts are underway to pressure its leadership to drop the case.
“These respondents, through their insatiable greed, have directly or indirectly caused unnecessary deaths of frontline police officers and have certainly resulted in the theft of SAPS funds,” the SIU affidavit concludes in a harsh manner.
However, Gumede and Qwabe insist that the inquiry is based on lies and has political motivations. There are concerns over their legal approach because they have not yet provided sworn affidavits to support their assertions.
Gumede’s connections to significant infrastructure projects, such as HPX’s Liberty Corridor, may prompt further inquiries into whether the same procurement practices made public in the South African PPE scam may appear in West Africa’s high-stakes mining industry as scrutiny of his activities grows.
Photo credit: Executive Mansion
